Merge Labs Secures $252M from OpenAI and Bain Capital for Brain-Computer Interface Development

Merge Labs, a brain-computer interface (BCI) startup co-founded by OpenAI CEO Sam Altman, has raised $252 million in a funding round that includes participation from OpenAI and Bain Capital, according to people familiar with the matter. The investment values the company at over $1 billion, placing it among the most well-funded BCI ventures as the field moves from academic research toward commercial applications.

The funding round, which closed in late 2025, represents one of the largest single investments in a BCI company to date. OpenAI's participation is particularly notable, as it marks the AI giant's first direct investment in a human-computer interface venture. Bain Capital, a private equity firm with a history of backing technology infrastructure, joins as a strategic investor. The round also included several undisclosed institutional and individual investors.

Merge Labs was founded in 2023 by Sam Altman and a team of neuroscientists and engineers from Stanford and MIT. The company's stated mission is to develop non-invasive BCI devices that can translate neural signals into digital commands, initially targeting medical applications for paralysis patients before expanding to consumer use. Unlike invasive approaches like Neuralink, which requires surgical implantation, Merge Labs is reportedly pursuing a high-density EEG-based system that can be worn like a headband.

The company has not yet publicly demonstrated its technology, but sources indicate it has conducted preliminary human trials with promising results in signal decoding accuracy. The $252 million infusion will primarily fund expanded clinical trials, manufacturing scale-up, and regulatory filings with the FDA. Merge Labs is expected to submit its first Investigational Device Exemption (IDE) application in Q2 2026, targeting a limited commercial launch for medical applications by 2027.

OpenAI's investment strategy appears to be diversifying beyond pure AI model development. While the company has previously invested in robotics and infrastructure startups, this marks its first foray into direct human-computer interaction technology. Industry analysts speculate that OpenAI sees BCI as a potential future input/output channel for its AI systems, though no formal partnership between the two companies has been announced. The investment could also provide OpenAI with early access to neural data patterns that could inform future AI model training, though Merge Labs has emphasized its commitment to user privacy and data sovereignty.

Bain Capital's involvement suggests confidence in the commercial viability of BCI technology. The firm has previously invested in medical device companies and digital health platforms, and its participation may signal that BCI is transitioning from a speculative research area to an investable asset class. The $252 million round brings Merge Labs' total funding to approximately $300 million since its inception, putting it on par with competitors like Synchron (which has raised $220 million) and Paradromics (approximately $150 million).

The BCI market is projected to reach $3.7 billion by 2030, according to market research firm Grand View Research, driven primarily by medical applications for conditions like ALS, spinal cord injuries, and stroke rehabilitation. Consumer applications, including gaming and productivity enhancement, represent a longer-term opportunity but face significant regulatory and ethical hurdles. Merge Labs' non-invasive approach may face challenges in achieving the high-bandwidth data transfer required for complex tasks, but it offers advantages in safety and accessibility compared to surgical implants.

The funding announcement comes amid increased scrutiny of BCI technology and its implications for privacy and human augmentation. In 2025, the U.S. Food and Drug Administration issued draft guidance on BCI devices, emphasizing the need for rigorous safety testing and long-term monitoring. Merge Labs will need to navigate these regulatory requirements while also addressing ethical concerns about neural data collection and potential misuse of the technology.

Competition in the BCI space is intensifying. Neuralink, founded by Elon Musk, has conducted human trials with its implantable device and is seeking FDA approval for broader clinical use. Synchron's stentrode device, which is implanted via blood vessels rather than open brain surgery, has also entered human trials. Paradromics is developing a high-bandwidth implant for communication restoration. Merge Labs' non-invasive approach differentiates it from these competitors but may limit its initial applications to less complex tasks.

The company's leadership team includes Dr. Sarah Chen, a former Stanford neuroscientist who led research on neural decoding algorithms, and Michael Torres, an engineer from Apple's health technology division. Altman serves as chairman and provides strategic guidance but is not involved in day-to-day operations, according to sources familiar with the company's structure.

Merge Labs is headquartered in San Francisco with a research facility in Cambridge, Massachusetts. The company plans to expand its team from approximately 50 employees to over 150 by the end of 2026, focusing on engineering, clinical research, and regulatory affairs. The new funding will also support the development of a manufacturing facility capable of producing thousands of devices annually.

While Merge Labs has not announced specific partnerships with healthcare providers, industry observers expect the company to collaborate with major hospital systems for clinical trials and eventual distribution. The medical BCI market typically requires partnerships with established healthcare institutions to gain patient trust and regulatory approval.

The investment landscape for BCI technology has evolved significantly over the past three years. Venture capital funding in the sector grew from $150 million in 2022 to over $800 million in 2025, according to data from PitchBook. This growth reflects increasing confidence in the technology's potential, though many investors remain cautious about the long development timelines and regulatory risks associated with medical devices.

Merge Labs' success will depend on several factors: achieving reliable signal decoding accuracy, demonstrating safety in human trials, navigating FDA approval processes, and ultimately creating a product that patients and consumers find valuable. The company's non-invasive approach may help it avoid some of the surgical risks associated with implantable devices, but it must still prove that it can deliver meaningful functionality without compromising user comfort or data quality.

The involvement of OpenAI and Bain Capital provides Merge Labs with not only capital but also strategic resources. OpenAI's expertise in machine learning could potentially accelerate the development of neural decoding algorithms, while Bain Capital's experience in scaling medical device companies could help navigate the complex path from prototype to commercial product.

As Merge Labs moves forward with its technology development and regulatory strategy, the BCI industry will be watching closely. The company's progress could influence investor sentiment across the sector and potentially accelerate the timeline for bringing non-invasive BCI technology to market. For patients with neurological conditions, a successful non-invasive BCI could offer a less risky alternative to surgical implants, potentially expanding access to this transformative technology.

The $252 million investment represents a significant bet on the future of human-computer interaction. Whether Merge Labs can deliver on its promise of a practical, non-invasive BCI system remains to be seen, but the substantial funding and strategic backing suggest that the company has positioned itself as a serious contender in the rapidly evolving BCI landscape.