While Elon Musk’s Neuralink likes to say it’s “pioneeringBrain-computer interfaces (BCIs), China’s BCI industry is already moving quietly from research to scale.
A new wave of startups is racing to commercialize both implantable and non-invasive BCIs, backed by stronger political support, expanding clinical trials and growing investor interest. So says Phoenix Peng, who has founded not one but two BCI startups. He is the co-founder of NeuroXess, a BCI implant manufacturer, as well as the founder and CEO of the non-invasive BCI ultrasound company startup Gestala.
His belief in the potential of this market is based on concrete action: Provinces such as Sichuan, Hubei and Zhejiang already have determining the pricing of medical services for BCI, accelerating its integration into the national medical insurance system.
Over time, he predicts the technology will expand beyond medical “disease treatment” to “human augmentation,” he said.
“I’ve always argued that neuroscience and artificial intelligence are two sides of the same coin,” Peng said. “They are intended for deep integration, making direct, high-bandwidth connections between the human brain and artificial intelligence. BCI will serve as the ultimate bridge between carbon-based and silicon-based intelligence. While this may sound far-fetched, it represents an unimaginably huge market in the future.”
Four factors driving BCI in China
But over the next three to five years, BCI use is likely to remain concentrated in healthcare, with the market reaching multibillion-dollar scale as insurance coverage expands, Peng told TechCrunch.
In August 2025, China’s Ministry of Industry and six other agencies national road map was released to further accelerate the development of BCIs. The plan aims for major technical milestones by 2027, common industry standards and a complete supply chain by 2030, with the aim of creating globally competitive BCI companies and supporting smaller specialist companies.
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Asked what is driving China’s rapid progress in BCI, Peng told TechCrunch that it depends on four factors. The first is strong policy support, with cross-departmental collaboration that aligns technical standards and medical reimbursement. In December, at Shenzhen BCI & Human-Computer Interaction Expo 2025, China was announced an 11.6 billion yuan ($165 million) brain science fund to support BCI companies from research to commercialization;
The second factor is vast clinical resources, including large patient cohorts and lower research costs that accelerate trials. China’s national health insurance means faster commercialization once the state approves a device. This compares to the US where even after a device is approved by the FDA, private insurance companies, as primary payers, must do so individually.
Researchers have completed the first fully implanted, wireless BCI trial in the country—only the second in the world—that allows a paralyzed patient to control devices without external hardware. per CGTN. Neuralink is the startup that completed the first such test.
“In traditional electrical BCIs, Chinese companies have achieved clinical progress in motor and language decoding, spinal cord reconstruction and stroke rehabilitation, with more than 50 flexible implantable BCI clinical trials completed by mid-2025,” Peng said, adding that next-generation efforts are now moving in the direction of whole-brain neural decoding. Gestala‘small.
The third factor is China’s mature manufacturing, Peng points out, spanning semiconductors, artificial intelligence and medical hardware, which supports rapid R&D and prototyping. Finally, there are strategic investments in the market, with government and private capital increasing as part of national initiatives.
Some recent key deals include Shanghai-based startup BCI StairMed Tech raising $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotechnology company developing its non-invasive BCIs and bionic limbs, it is also quiet filed for an IPO in Hong Kong, according to reports, after the increase $287 million (2 billion yuan) earlier this year. Peng’s company Gestala, which launched in January, is in talks with investors to close an angel round soon, he tells us.
Overall, Chinese BCI startups are rising to challenge US leaders such as Neuralink, Synchron, and Paradromics. Among the most active players in China they are NeuroXess, Neuracle, NeuralMatrix, BrainCo, Bo Rui Kang Tech, Aoyi Tech, Brainland Tech and Zhiran Medical. They cover approaches from implantable flexible interfaces to non-invasive brain-computer technologies.
This means that China’s BCI market was expected to grow to more than $530 million (3.8 billion yuan) in 2025, from 3.2 billion yuan in 2024, according to media reports, with projections putting the market at over 120 billion yuan by 2040.
Types of BCI
BCIs follow two paths. The first are invasive electrophysiological BCIs such as NeuroXess and Neuralink that implant electrodes in people’s brains for precise signals at the neuronal level. But this type comes with surgical risks. The second type is non-invasive systems such as NeuroSky and BrainCo that trade some accuracy for security and ease of use. (These devices—usually headphones or headbands that use electroencephalography (EEG)—read electrical activity through the skull.)
The field is now expanding further, with emerging approaches—including ultrasound, magnetoencephalography, transcranial magnetic stimulation, optical methods, and hybrid BCIs—giving researchers new tools to read and influence brain activity.
Startup founders also hope the non-invasive technology could help overcome adoption barriers. Not everyone is willing to undergo brain surgery to have a device implanted in their head.
Ultrasound BCI from companies such as Fusion labs powered by OpenAI and Gestala target high-prevalence conditions such as chronic pain, stroke and depression. As non-invasive solutions, these technologies are more readily accepted by patients and offer significantly greater commercial scalability.
Gestala, for example, expects to launch its first-generation product by the third quarter, Peng said. Early clinical trials showed promising results, he added, saying a single session reduced pain scores by 50 percent, with results lasting one to two weeks.
HSG, formerly Sequoia China, has meanwhile invested in Zhiran Medical, a startup founded in 2022 focused on improving the long-term performance of implants. The company uses high-performance flexible electrodes to reduce inflammation and signal loss associated with rigid implants.
“Some technologies may seem cutting-edge, but they are far from practical application,” said Yang Yunxia, a partner at HSG. he wrote in a blog post. While others appear commercially viable, they face “high costs” or significant technical hurdles, Yunxia argued. Ultimately, investment decisions depend on whether the investor believes a product can grow into a viable business, the partner noted.
In the coming years
Over the next five years, industry insiders expect China’s BCI regulations to align more closely with international standards, with particular emphasis on regulatory approval and data sovereignty. Global frameworks developed by organizations such as IEC and ISOalong with guidance from The US Food and Drug Administration (FDA), are expected to act as key reference points.
Chinese regulators are also expected to strengthen oversight of invasive devices, as well as the data generated by all BCI devices, while easing approval for non-invasive technologies.
As for ethics dealing with devices implanted in the brain or manipulating devices, China plans to strengthen informed consent requirements, expand ethics review beyond medicine, and move toward unified technical clinical evaluation standards.
