Capital Surge of $7 Billion! Dual Breakthroughs in Flexible Electrodes and AI Decoding Propel Brain-Computer Interfaces into the Fast Lane

In 2025, brain-computer interface (BCI) technology has officially emerged as a focal point in China’s medical technology industry, marking a critical transition from laboratory research to clinical application and from conceptual frameworks to industrialization. The proactive policy layout, breakthroughs across the entire technological supply chain, a surge in clinical applications, and sustained capital investment have collectively outlined a new development landscape for this emerging industry.

Recently, the third installment of "Insights on Relativity," part of the "China Innovative Medical Asset Lounge" series co-hosted by VCBeat and Weijieyao,He Wenbin, Co-Chief Healthcare Analyst, Guotai Haitong Securities Research InstituteA landmark judgment has been proposed: 2025 is the “Year One” of China’s brain-computer interface (BCI) development, with a proactive national-level strategy paving the “fast track” for an industry boom.

Data shared by He Wenbin shows that in 2025 alone, China’s brain-computer interface (BCI) sector completed 24 financing rounds, with a total amount exceeding RMB 5 billion. Behind this surge in capital investment lies clear policy guidance and strong governmental support.

Unlike the traditional pathway for medical devices, which involves “approval first, pricing next, and inclusion in the national medical insurance scheme last,” the brain-computer interface (BCI) field has witnessed a rare phenomenon of “policy leading the way.” In March 2025, the National Healthcare Security Administration took the lead in setting prices for BCI-related surgeries and services; in September of the same year, it issued a notice on the application of supplementary codes for innovative pharmaceuticals and medical consumables.

“This means that the future pricing pathway and medical insurance payment framework are already in place before the product even hits the market,” explained He Wenbin. Local governments are also taking concurrent action. Shanghai, Beijing, Hubei, Zhejiang, and other regions have successively introduced their own policies to support the brain-computer interface industry, forming a multi-tiered policy support network from the central government down to local authorities.

“It is extremely rare in the healthcare sector for policy to outpace industry development.” He Wenbin drew a parallel between this phenomenon and the 2014 regulatory reforms for innovative drugs, noting, “Those reforms ushered in a ‘golden decade’ for China’s innovative pharmaceutical industry, while the current policy framework for brain-computer interfaces may be initiating the next cycle of industrial explosion.”

On the technical front, He Wenbin first clarified the basic components of brain-computer interfaces (BCIs): “They consist of three parts—the brain, the machine, and the interface.” He specifically pointed out that the “brain” component may in the future expand to include the spinal cord and peripheral nervous system, while the “machine” is not limited to computers or wheelchairs; lightweight devices such as mobile phones could also serve as terminals.

In terms of technical approaches, brain-computer interfaces (BCIs) can be categorized into three types based on the degree of invasiveness: non-invasive, semi-invasive, and invasive. He Wenbin pointed out that, compared with non-invasive BCIs, invasive/semi-invasive BCIs can acquire higher-quality neural signals and are suitable for treating patients with severe functional impairments.

Among upstream core components, electrodes are key to technological breakthroughs. Although the traditional “gold standard” Utah electrode has been commercialized, its rigid material causes a mechanical mismatch with soft brain tissue, limiting long-term implantation efficacy.

Flexible Electrodes Have Thus Become the Main Direction of Development, with materials that better conform to brain tissue and offer improved biocompatibility. Currently, there are four main technological approaches for electrodes worldwide: Utah arrays, flexible microfilament electrodes (the current mainstream focus of R&D), endovascular electrodes, and cortical surface microelectrode arrays.

At the corporate level, Elon Musk’s Neuralink serves as the industry benchmark. Its polyimide-based flexible electrodes have already achieved 1,024 channels, with plans to scale up to tens of thousands in the coming years, exhibiting “Moore’s Law”-like growth. Additional core advantages include R1 robot-assisted implantation, N1 chip integration, and wireless data transmission and charging.

Domestic companies are also rapidly catching up. The ultra-flexible electrodes developed by Step Medical have reached 128 channels per single array; BrainCo has innovatively adopted silk fibroin as the substrate material, which offers controllable degradation and natural antibacterial properties; although NeuroXess has a lower channel count (8 channels), its appropriate strategic approach has enabled the fastest clinical progress. “Generally, a higher channel count enhances signal acquisition capability, but the technical difficulty increases exponentially,” said He Wenbin.

In addition to electrodes,Chips are another core component of the upstream sector.Neuralink’s custom chip achieves a high degree of integration among electrodes, the chip itself, and the battery, enabling high throughput while maintaining low power consumption and minimal heat generation. In contrast, domestic companies in China currently predominantly rely on general-purpose chips, some of which suffer from overheating issues. Therefore, the development of customized chips represents a critical technological breakthrough that Chinese enterprises must pursue.

In addition, He Wenbin particularly emphasized,The Integration of AI and Brain-Computer Interfaces Will Be Key to Technological Upgrades and Commercialization“Major papers on brain-computer interfaces published in top global journals in 2025 are largely related to AI.” AI can significantly improve the accuracy of EEG signal decoding and adapt to signal drift over time, thereby enhancing the long-term stability of the devices.

Clinical progress is a key indicator for measuring the maturity of brain-computer interface (BCI) technology. He Wenbin shared the latest developments both globally and in China.

As a global leader, Neuralink completed its first human implant in January 2024 and had publicly reported completing 13 implants by 2025. Most of these patients suffered from spinal cord injuries or amyotrophic lateral sclerosis (ALS), and post-surgery, they have been able to perform basic functions such as controlling a mouse and playing simple games.

Domestic enterprises are also catching up rapidly, forming a landscape in which multiple companies are advancing side by side:

NeuroXess is progressing the fastest, focusing on a semi-invasive approach. Since completing its first implantation in October 2023, the company had enrolled a cumulative total of 32 patients with spinal cord injuries by 2025. Post-surgery, patients are able to perform actions such as self-feeding, drinking water, and picking up small steel balls. He Wenbin predicts that NeuroXess is poised to become the first company in China to obtain product registration approval in 2026.

Jieti Medical has opted for the more technically challenging invasive approach, aligning closely with Neuralink’s technological pathway, and completed its first-in-human clinical trial in the first quarter of 2025.

Xinzhida and Taotronics Brain also have their own unique features. The former has adopted a dual-track approach with its semi-invasive product “Beinao No. 1” and its invasive 1,024-channel product “Beinao No. 2,” completing 13 implantations by 2025. The latter has demonstrated outstanding performance in language decoding, having conducted extensive animal studies previously and completed its first human clinical trial in December 2025.

“2025 Can Be Described as the Breakout Year for Clinical Validation of Brain-Computer Interfaces in China.” He Wenbin concluded. He also mentioned that BrainCo, another company attracting significant investor attention, recently completed a large round of financing jointly invested by leading domestic and international private equity firms and industrial capital, becoming the focus of the capital market.

What path will the commercialization of brain-computer interfaces follow? He Wenbin pointed out that the industry consensus is “Medical Care First, Consumption Second”。

Elon Musk has outlined Neuralink’s commercialization roadmap: the initial phase focuses on medical applications, reducing product prices to $5,000–$10,000; in the long term, it aims to expand into the consumer electronics sector, lowering prices to approximately $1,000—on par with smartphones—to achieve widespread adoption. Currently, downstream commercialization has already been implemented in the light medical sector, becoming a key driver for industry development.

In light medical and consumer-grade application areas, such as interventions for childhood autism, sleep monitoring, and brain modulation devices, actual revenue has already been generated. Although these products have relatively lower requirements for signal precision, they excel in being non-invasive and user-friendly, marking the first step in bringing brain-computer interface technology to the general public.

Among these, deep brain stimulation (DBS) is currently the most commercially mature subsector. The global leader, Medtronic, achieves annual revenues in the billions of US dollars in this field, while Chinese companies have also reached a scale of hundreds of millions of RMB. Although such technologies are not entirely equivalent to the brain-computer interfaces (BCIs) commonly recognized by the general public, their closed-loop logic of “acquisition–decoding–modulation” provides a referenceable pathway for the commercialization of invasive BCIs.

The segment with the greatest market potential—invasive/semi-invasive brain-computer interfaces (BCIs) that enable paralyzed patients to walk again and allow those with amyotrophic lateral sclerosis (ALS) to “speak” once more—remains in the clinical validation stage and has not yet achieved commercialization. He Wenbin emphasized that this area represents the highest technical value and the largest market potential, but its true release awaits regulatory approval of the products.

Despite rapid development, the brain-computer interface (BCI) industry still faces multiple challenges. He Wenbin listed four major difficulties:the complexity of EEG signals characterized by nonlinearity, non-stationarity, and significant inter-individual variability; long-term biocompatibility of electrode materials; high R&D and production costs; and the stringent regulatory approval process for Class III medical devices, are all obstacles that need to be overcome.

However, he also pointed out that these issues are being gradually resolved. The deep integration of AI technology is effectively enhancing the accuracy and stability of signal decoding; continuous innovations in electrode materials, such as ultra-soft electrodes, “neural worms,” and conductive polymer composites, are steadily improving performance and biocompatibility; furthermore, forward-looking policy initiatives and sustained capital inflows are providing support for corporate R&D and cost control.

Looking ahead, He Wenbin has provided a clear timeframe:The Next Decade Will Be a Critical Window for the Commercialization of Brain-Computer Interfaces. In accordance with the plan of the Ministry of Industry and Information Technology, China will achieve breakthroughs in key brain-computer interface technologies and establish an advanced technology and standard system by 2027; by 2030, it will cultivate two to three leading enterprises with global influence and a group of specialized, refined, distinctive, and innovative small and medium-sized enterprises, thereby building an industrial ecosystem with international competitiveness.

“The industry is currently in a ‘golden window period’ marked by the convergence of multiple favorable factors, including policy support, capital inflow, and technological advancements,” summarized He Wenbin. “For investors, key areas worthy of close attention include upstream core components, midstream AI decoding algorithms, and downstream medical applications with well-defined clinical pathways.”

With the first product registration certificate potentially being issued in 2026, China’s brain-computer interface (BCI) industry is transitioning from its inaugural year of “policy-led development” to a new phase of “product commercialization.” This technology, once confined to science fiction, is rapidly integrating into real-world medical scenarios and could profoundly transform the lives of patients with severe functional impairments within the next decade.