Merge Labs, backed by Elon Musk’s Neuralink and OpenAI, is pushing brain-computer interface (BCI) technology in the United States. Meanwhile, Chinese serial entrepreneur Phoenix Peng is pursuing competing efforts through two startups: NeuroXess, which develops an implantable BCI system, and Gestala, a second company developing a non-invasive ultrasound-based BCI.
Within two months of launch, Gestala raised $21.6 million (CN$150 million) at a valuation of $100 million to $200 million, founder and CEO Phoenix Peng told TechCrunch.
The round, co-led by Guosheng Capital and Dalton Venture, with participation from Tsing Song Capital, Gobi Ventures, Fourier Intelligence, Liepin and Seas Capital, was oversubscribed, with a total of more than $58 million in investor commitments, Peng added.
This is the largest early-stage funding in the Chinese BCI industry. Peng plans to use the funds for R&D, expanding its staff from 15 to about 35 by the end of the year and building a manufacturing facility in China. The three-month-old startup aims to complete its first-generation prototype by the end of this year.
The global BCI industry is currently experiencing a surge in investment in ultrasound technology. Gestala is the first ultrasound BCI company in China, but not the first in the world. Several ultrasound BCI startups have emerged in recent years, including Merge Labs, the largest in the US.
Peng believes that ultrasound may represent the next generation of brain-computer interface technology, providing broader whole-brain accessibility and new ways to interact with neural activity.
The founders say non-invasive ultrasound could address one of the biggest barriers to BCI adoption: the risks associated with brain surgery. Compared to implanted electrode systems, this technology can monitor larger areas of the brain, including deep neural circuits. Using phased-array ultrasound, he explained, the system can precisely stimulate or suppress neural activity without surgery.
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Despite rising geopolitical tensions, Peng still hopes the United States and China can cooperate on in-depth technological research.
“Both countries have different strengths,” Deputy Prime Minister Peng said. “China offers large-scale clinical research capabilities and an efficient supply chain, while the United States has world-class scientific talent.” He said joint efforts could also be focused on building large clinical datasets to support global neuroscience research.
The company is exploring a variety of uses for its technology. Medically speaking, chronic pain management is the startup’s main program. Chronic pain affects large populations in both the United States and China, and existing academic research suggests that ultrasound stimulation can significantly reduce pain levels, Peng said.
The startup is also exploring applications for mental health conditions, including depression, PTSD, autism, obsessive-compulsive disorder, and stroke rehabilitation. Other long-term targets include Alzheimer’s disease, essential tremor, and Parkinson’s disease. In total, the company is studying six to eight potential indications, but most remain in the early research stages rather than clinical trials.
Gestala says its advantage over global competitors comes down to speed and scale. The startup believes that by leveraging China’s integrated manufacturing ecosystem, it can move from development to production faster than many of its international competitors.
The company is also working with leading hospitals in China to accelerate clinical trials at significantly lower costs. This corresponds to approximately 20-33% compared to comparative studies in the United States or Europe. At the same time, Gestala is building an “ultrasound brain bank,” a large-scale clinical data set designed to train AI models to decipher brain signals and support future neurological diagnoses.
