On January 15, 2026, Sam Altman just dropped a bombshell. OpenAI-the company he leads-just became the lead investor in Merge Labs, his new brain-computer interface startup, backing a $252 million seed funding round. At an $850 million valuation, this makes Merge Labs the second-most heavily funded BCI company in the world, right behind Elon Musk’s Neuralink. But here’s what’s wild: Merge Labs isn’t even close to having a product. This is pure research. So why would OpenAI, Bain Capital, and Valve co-founder Gabe Newell throw a quarter-billion dollars at what’s essentially a neuroscience lab? The answer reveals everything about where Silicon Valley believes the next frontier of AI interaction is heading.
Why It Raised $252M – Main Reason
Sam Altman and his co-founder Mikhail Shapiro (a Caltech chemical engineering professor who’s been studying the brain for decades) believe that as AI becomes more advanced, humans will need faster, more direct ways to interact with it. Right now, you type into ChatGPT or use voice. That’s slow. That’s limited. Your brain processes information at speeds and volumes that text and speech can’t match. If you could connect your brain directly to AI, you’d be able to think at the speed of AI, essentially merging biological and artificial intelligence.
The key insight is this: Neuralink went all-in on implantable electrodes-invasive brain surgery where they drill into your skull and implant threads directly into your brain tissue. It works, but it’s hardcore. Only medical patients desperate for treatment will voluntarily get brain surgery.
Merge Labs is taking a completely different path. They’re building non-invasive brain-computer interfaces. Their approach: use ultrasound (which already penetrates deep into tissue safely) combined with molecular approaches instead of electrodes. No brain surgery. No implants into tissue. Just a device that sits on your head and communicates with your brain using sound waves and molecules. That’s revolutionary because it means BCIs could eventually be available to healthy people-not just patients.
OpenAI sees this as the next critical interface for AI. Right now, the interface is a screen. In five years, it might be your brain. OpenAI doesn’t want to be left behind. That’s why they’re funding it.
Where Will Merge Labs Use the Fund ?
Merge Labs is structured as a long-term research lab, not a startup racing to launch a product. The $252 million is going into pure R&D.
First: Building the science. Merge Labs needs to solve fundamental neuroscience problems that haven’t been solved yet. They’re working on increasing bandwidth-essentially, how much data you can send to and from the brain simultaneously. They’re also researching how to interface with massive portions of the brain without invasive hardware. This is foundational science, and it requires world-class researchers, lab equipment, and years of experimentation.
Second: Developing the technology. They’re building new ultrasound-based modalities and molecular approaches to connect with neurons. They’re not just theorizing-they’re prototyping. They’re studying mice and rats first (standard in neuroscience) before eventually moving to human trials.
Third: AI collaboration with OpenAI. Merge Labs announced they’re collaborating with OpenAI on developing AI systems capable of interpreting neural data. This is critical because raw brain signals are noise. AI needs to decode what that noise means. OpenAI will help build the algorithms that translate brain activity into actionable commands and thoughts.
Fourth: Building infrastructure. Funding pays for labs, hiring neuroscientists, engineers, and AI researchers-some of the smartest people on the planet.
How Merge Labs Makes Money ?
Here’s the honest answer: Merge Labs doesn’t make money yet. They don’t have a product. They don’t have customers. They have a research lab and a vision.
The company’s stated plan is: first, build for medical applications. Then, expand to consumer.
Medical Phase (Years 1-3): Merge Labs will partner with hospitals and medical centers to help people with paralysis, neurological disorders, or brain injuries. A paralyzed person could use a BCI to control robotic limbs or wheelchairs with their thoughts. This is where Neuralink is already operating. Merge Labs would do the same but non-invasively.
The revenue model here is straightforward: they license the technology to hospitals, insurance covers procedures, patients pay through insurance or out-of-pocket. Similar to how medical device companies operate. Think of a spinal cord stimulator or pacemaker-devices that cost tens of thousands of dollars.
Consumer Phase (Years 5+): Once the technology is proven safe in medical settings, Merge Labs could expand to healthy people who want cognitive enhancement. Gamers might use a BCI to control in-game characters with pure thought. Programmers might use it to write code faster. Students might use it to learn faster. A Neuralink-style implant for healthy people could easily cost $100,000+. A non-invasive Merge Labs device could be cheaper because it doesn’t require surgery. Market size? Billions. Eventually, trillions.
Enterprise licensing: Merge Labs could license their AI models and neural interface technology to other companies-similar to how OpenAI licenses GPT models. A gaming company could build a BCI controller. A productivity app could integrate brain interfaces. Merge Labs becomes the infrastructure layer.
But here’s the reality: none of this happens for years. This is venture capital betting on an eventually massive market. Investors are putting money on the belief that BCIs will become as normal as smartphones in 10-20 years. And whoever owns the non-invasive technology first wins the market.
That’s why $252 million in seed funding makes sense. It’s not about revenue tomorrow. It’s about dominance in a market that doesn’t exist yet but will soon.
Source:- Bloomberg
Hi Friends, This is Swapnil, I am a content writer at startupsunion.com