OpenAI has written the largest check in brain-computer interface startup Merge Labs’ $252 million seed round at an $850 million valuation, backing CEO Sam Altman’s ultrasound-based neurotechnology venture that uses gene therapy to connect human brains directly to artificial intelligence, a strategic expansion into neural interfaces that positions OpenAI for hardware-AI convergence while raising governance questions about Altman’s portfolio of interconnected ventures.

The investment, announced on January 15, 2026, marks OpenAI’s boldest hardware move yet. Merge Labs will develop non-invasive brain-computer interfaces using ultrasound and genetic engineering rather than surgical implants, creating a direct challenge to Elon Musk’s Neuralink, which has already implanted devices in five paralyzed patients across the US, Canada, and the UAE.

Why Ultrasound Beats Surgical Implants

Merge Labs is taking a different approach to brain-computer interfaces than Neuralink. Instead of drilling into skulls to implant tiny electrode threads into brain tissue, they are using a more innovative blend of technologies.

The first step involves genetically modifying brain cells so they can respond to ultrasound. Then they implant a device that uses ultrasound to read and modulate neural activity, all without penetrating the brain. This approach aims to offer a safer, non-invasive way to assess brain function.

This technique, called sonogenetics, avoids open-brain surgery while potentially enabling access to broader regions of the brain than localized electrode arrays. Mikhail Shapiro, the Caltech biomolecular engineer leading Merge Labs’ scientific team, pioneered this approach through years of research on acoustic neurons.

“It’s easier to introduce genes into cells” to make them ultrasound-responsive than implant physical electrodes, Shapiro said during recent presentations.

However, the timeline reveals brutal realities. Merge Labs acknowledged commercial products won’t arrive for “decades rather than years,” with clinical trials planned for Q4 2026 and FDA submissions targeting mid-2027.

Meanwhile, Neuralink patient Noland Arbaugh already uses his brain-computer interface for over 100 hours per week to control computers, play video games, and operate design software, demonstrating functional superiority that Merge Labs won’t match until the early 2030s.

The $6 Billion Market and Strategic Positioning

The global brain-computer interface market will reach $6.16 billion by 2032 from $2.40 billion in 2025, growing at 14.4 percent annually, according to Coherent Market Insights. The US brain-computer interface market alone will expand from $617.6 million (2025) to $2.7 billion (2034) at a 17.9 percent compound annual growth rate.

Yet market segmentation reveals strategic tension. Invasive brain-computer interfaces dominate medical applications for paralysis and blindness, where Neuralink leads. Non-invasive interfaces represent just $430.83 million (2026) but are projected to grow at 8.73 percent through 2033, reflecting investor belief that mass adoption requires avoiding surgery.

Merge Labs bets consumers will accept gene therapy and skull access for ultrasound transducers but reject craniotomy procedures. Whether this proves correct won’t be clarified until comparative clinical data emerges in the early 2030s.

OpenAI’s Hardware Convergence Play

The Merge Labs investment extends OpenAI’s aggressive 2025 hardware push. The company acquired designer Jony Ive’s firm io for $6.5 billion, launched custom AI chip development with Broadcom and TSMC, committed to 6 gigawatts of AMD GPUs plus $100 billion in NVIDIA infrastructure, and established proprietary data centers, collectively representing over $1 trillion in partnerships through 2029.

OpenAI’s rationale connects these initiatives directly. “Progress in interfaces enables progress in computing,” the company stated. “High-bandwidth interfaces will gain from AI operating systems capable of interpreting intent, adapting to individual users, and functioning effectively even with limited or noisy signals.”

Brain-computer interfaces are revolutionizing how we understand human thought, providing the essential neural data that OpenAI’s models need to decode our minds. Meanwhile, OpenAI’s advanced algorithms offer the machine learning infrastructure that Merge Labs needs to interpret the complex signals from our brains. This collaboration creates a seamless platform that connects everything from our neural activity straight to the cloud.

Financially, the potential is substantial. By July 2025, OpenAI had generated an impressive $12 billion in annual recurring revenue.

However, it’s important to note that the company is also facing significant expenses, burning through $8.5 billion each year and is not expected to be profitable until 2029. The recent $252 million investment in Merge Labs accounts for about 3 percent of OpenAI’s annual cash burn. While this is a meaningful investment, it’s manageable for a company valued at $500 billion.

The Governance Question

Sam Altman co-founded Merge Labs with Alex Blania (CEO of Tools for Humanity, Altman’s iris-scanning identity project), Sandro Herbig, and Caltech scientists. Though OpenAI’s ventures team invested, not Altman personally, the structure revives governance concerns.

Sam Altman’s earlier project, Worldcoin, has faced significant pushback, including regulatory bans in countries such as Portugal, Kenya, and Spain, due to concerns about biometric privacy. Critics have raised eyebrows at the way it operates, describing it as a circular business model—suggesting that one of Altman’s ventures creates a problem while another offers a solution.

In this case, OpenAI is seen as generating risks associated with artificial intelligence, while Worldcoin promotes its identity verification service as a safeguard against those very risks. It’s a contentious dynamic that raises important questions about the intersection of technology, privacy, and ethics.

Merge Labs carries similar dynamics. If neural interfaces enable a direct brain-AI connection, this would increase OpenAI’s value by opening new distribution channels and data sources. OpenAI thus has a financial incentive to overinvest in Merge Labs despite technical uncertainty.

Altman stepped down from the chairmanship of nuclear company Oklo in April 2025 to “avoid conflict of interest,” acknowledging that multiple ventures create governance risks. Yet he proceeded with Merge Labs, suggesting either confidence in structural safeguards or acceptance of reputational risk for strategic positioning.

What This Means for the Industry

Three key turning points will play a crucial role in determining success:

Clinical Data by Late 2027: Merge Labs needs to demonstrate that its combination of gene therapy and ultrasound can match the performance of Neuralink’s electrodes without significant safety concerns. If they can’t do this, the entire rationale for investment falls apart.
FDA Regulatory Pathway: Navigating the regulatory landscape for gene therapy combined with neurotechnology is uncharted territory. If the FDA demands extensive preclinical data, it could push commercial launch timelines back to the 2030s, potentially leaving them missing crucial market opportunities.
Neuralink’s Commercial Launch: If Neuralink secures FDA approval for its paralysis treatment between 2026 and 2027, it could set a standard for invasive electrodes, potentially overshadowing Merge Labs and shaping public perception of its “experimental gene therapy” approach.

For both investors and founders, the message is clear: brain-computer interfaces offer an incredible billion-dollar opportunity, but true winners will likely emerge only in the early 2030s as clinical results, regulatory approvals, and consumer trends take shape. OpenAI’s $252 million investment in Merge Labs puts it in a strong position in the neural interface field, but the real benefit won’t be seen for another decade.

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