Sam Altman, CEO of OpenAI, is reportedly backing Merge Labs, a new brain-computer interface (BCI) startup poised to compete with Elon Musk's Neuralink. This move intensifies the rivalry between Altman and Musk, who previously worked together at OpenAI. Merge Labs aims to develop less invasive brain implants, leveraging recent advancements in artificial intelligence to enhance the connection between humans and AI.

Merge Labs is reportedly seeking to raise $250 million in funding at an $850 million valuation, with much of the capital expected from OpenAI's ventures arm. Altman's role will be limited; he will be a co-founder but is not expected to have a day-to-day role in the project. Alex Blania, CEO of World, a digital ID project using eye-scanning technology, will also co-found the company. The company's name, "Merge Labs," reportedly refers to "the merge," a concept describing a future where humans and machines converge.

Neuralink, founded by Musk in 2016, has been developing brain implants to help people with paralysis control devices with their thoughts. The company has achieved a $9 billion valuation and has already tested its implants in humans. Neuralink recently demonstrated how its BCI enables users to control video games using only their minds and shared that seven participants have been implanted with its device. They have also received regulatory approval to begin trials in Canada, the UK, and the UAE, signaling international expansion.

Merge Labs is exploring less invasive brain implants that do not require major surgery and will heavily rely on AI to improve how the technology functions. This approach differentiates it from Neuralink, which has already tested its more invasive implants in humans. Merge Labs wants to capitalize on recent advances in AI to create more useful brain-computer interfaces to integrate human cognition with AI.

The BCI field is rapidly advancing, with demonstrations of brain-controlled robots and drones at the 2025 World Robot Championship in Beijing. Scientists at UC Davis have also created a BCI system that translates brain signals into speech for a man with ALS, showcasing the technology's potential to transform rehabilitation, assistive tools, and human-computer interaction.

Several other companies are also active in the BCI space, including Synchron, Precision Neuroscience, BrainGate, Clinatec, Kernel, Neurable, Paradromics, BIOS, Blackrock Neurotech, MindMaze, and Inbrain Neuroelectronics. Synchron is further along in the clinical trial process than Neuralink. Precision Neuroscience, founded by a Neuralink co-founder, is developing an invasive BCI designed to be placed on the surface of the brain.

Sam Altman has a diverse investment portfolio, including stakes in over 400 companies valued at around $2.8 billion. His investments span various sectors, including energy, hardware, and drug discovery. Altman's involvement with Merge Labs adds another dimension to his portfolio and intensifies the competition in the neurotechnology field.