Although Elon Musk’s Neuralink claims to be “leading” in brain-computer interfaces (BCIs), the BCI sector in China is already subtly shifting from research to scaling production.

A fresh wave of startups is competing to commercialize both implantable and non-invasive BCIs, supported by greater policy backing, increasing clinical trials, and rising investor enthusiasm. This is according to Phoenix Peng, who has established two BCI companies. He is a co-founder of NeuroXess, which develops BCI implants, as well as the founder and CEO of the non-invasive ultrasound BCI startup Gestala.

His conviction in this market’s potential is based on tangible actions: Regions like Sichuan, Hubei, and Zhejiang have begun setting medical service prices for BCIs, accelerating their integration into the national medical insurance framework.

He envisions that over time, the technology will expand beyond merely “treating illnesses” to enabling “human enhancement,” he stated.

“I have consistently argued that neuroscience and AI are two complementary fields,” Peng remarked. “They are bound for profound integration, achieving direct high-bandwidth connections between human brains and AI. BCI will act as the ultimate link between carbon-based and silicon-based intelligence. While this may seem far off, it signifies an incredibly vast market in the future.”

Four Factors Propelling BCI in China

However, in the next three to five years, BCI application is expected to remain primarily within healthcare, with the market projected to reach a multibillion-dollar magnitude as insurance coverage widens, Peng informed TechCrunch. 

In August 2025, China’s ministry responsible for industry and six other entities presented a national roadmap aimed at accelerating BCI development. The plan states ambitious technical objectives by 2027, the establishment of universal industry standards, and a complete supply chain by 2030, with the aim of nurturing globally competitive BCI firms and aiding smaller specialized enterprises.

When asked what is fueling China’s swift advancement in BCI, Peng mentioned four key factors to TechCrunch. The foremost is robust policy support, featuring interdepartmental collaboration that synchronizes technical standards and medical reimbursement. In December, during the 2025 Shenzhen BCI & Human-Computer Interaction Expo, China unveiled an 11.6 billion yuan ($165 million) brain science fund designed to assist BCI firms from the research phase to commercialization.

The second factor is extensive clinical resources, which include large patient populations and reduced research expenses that expedite trials. China’s national health insurance facilitates faster commercialization once a device receives state approval. This contrasts with the U.S., where even after FDA approval, private insurers—being the primary funders—must each approve separately.

Researchers have accomplished the nation’s first fully implanted, wireless BCI trial — the second globally — enabling a paralyzed individual to control devices without external hardware, according to CGTN. Neuralink conducted the initial such trial.

“In traditional electrical BCIs, Chinese companies have made clinical strides in motor and language decoding, spinal cord reconstruction, and stroke rehabilitation, with over 50 flexible implantable BCI clinical trials finalized by mid-2025,” Peng noted, adding that next-generation projects are pivoting toward complete brain neural decoding and encoding, including ultrasound-based methodologies like Gestala’s.

The third element is China’s well-established industrial manufacturing, according to Peng, encompassing semiconductors, AI, and medical hardware, which accelerates R&D and prototyping. Lastly, there is strategic investment in the sector, with both state-sponsored funds and private capital increasingly flowing under national programs.

Recent significant deals include Shanghai-based BCI startup StairMed Technology securing $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotechnology company developing its non-invasive BCIs and bionic limbs, has also discreetly filed for a Hong Kong IPO, as reported, after raising $287 million (2 billion yuan) earlier this year. Peng’s company, Gestala, which commenced operations in January, is currently in discussions with investors to close an angel financing round imminently, he informs us. 

Overall, China’s BCI startups are gearing up to take on U.S. competitors like Neuralink, Synchron, and Paradromics. Among the most active entities in China are NeuroXess, Neuracle, NeuralMatrix, BrainCo, Bo Rui Kang Tech, Aoyi Tech, Brainland Tech, and Zhiran Medical. They cover various methodologies from implantable flexible interfaces to non-invasive brain-computer technologies.

Consequently, China’s BCI market is projected to grow to over $530 million (3.8 billion yuan) in 2025, a rise from 3.2 billion yuan in 2024, as per media reports, with estimates anticipating the market will exceed 120 billion yuan by 2040.

Types of BCIs

BCIs are branching into two avenues. The first involves invasive electrophysiological BCIs like NeuroXess and Neuralink that embed electrodes into people’s brains to capture precise neuron-level signals. However, this type involves surgical risks. The other type consists of non-invasive systems like NeuroSky and BrainCo that compromise some accuracy for enhanced safety and usability. (These devices — usually headsets or headbands utilizing electroencephalography (EEG) — measure electrical activity via the skull.)

The field is now expanding further, with innovative methods — including ultrasound, magnetoencephalography, transcranial magnetic stimulation, optical techniques, and hybrid BCIs — providing researchers with new instruments to read and impact brain functions. 

Startup founders are also hopeful that non-invasive technology can help eliminate adoption obstacles. Not everyone is amenable to undergoing brain surgery for device implantation.

Ultrasound BCIs from enterprises like OpenAI-backed Merge Labs and Gestala are focusing on common conditions such as chronic pain, stroke, and depression. As non-invasive solutions, these technologies are more readily embraced by patients and provide significantly enhanced commercial scalability.

Gestala, for example, anticipates launching its first-generation product by Q3, according to Peng. Early clinical trials have indicated encouraging outcomes, with a single session alleviating pain scores by 50%, with effects persisting for one to two weeks.

HSC, previously Sequoia China, has also invested in Zhiran Medical, a startup established in 2022 aimed at enhancing long-term implant effectiveness. The company employs flexible, high-throughput electrodes to mitigate inflammation and signal degradation linked to rigid implants.

“Certain technologies may seem advanced yet remain far from practical application,” Yang Yunxia, a partner at HSC, stated in a blog entry. While others might appear commercially feasible, they encounter “high costs” or notable technical challenges, Yunxia argued. Ultimately, investment choices hinge on whether the investor believes a product can evolve into a sustainable enterprise, the partner emphasized.

Looking Ahead 

In the coming five years, industry experts predict that China’s BCI regulations will increasingly align with international norms, prioritizing regulatory approval and data sovereignty. Global frameworks put forward by organizations such as the IEC and ISO, along with guidance from the U.S. Food and Drug Administration (FDA), are anticipated to act as significant reference points. 

Chinese regulators are also expected to enhance oversight of invasive devices, as well as the data produced by all BCI devices, while simplifying approval processes for non-invasive technologies.

Regarding the ethical issues surrounding devices that manipulate or implant within the brain, China intends to bolster informed-consent protocols, broaden ethical evaluations beyond the medical domain, and progress toward unified technical standards for clinical assessments.