Xuzhi VR + AI Digital Therapeutics: Exploring New Possibilities with the VR Cognitive Rehabilitation System

According to the 2021 census data, China’s population aged 60 and above reached 264 million, accounting for 18.70% of the total population. The elderly population is projected to reach 380 million by 2030, representing 25% of the total. Alongside the deepening aging of society, the number of patients with cognitive impairment has been increasing year by year. These patients typically experience age-related decline in brain function, leading to impairments in attention, memory, and executive control.

Apart from organic diseases, the deterioration of cognitive functions in the brain is mostly caused by mental disorders. Among these, Alzheimer's Disease (AD) is the most typical and widely recognized, having become the fourth major threat to the health of the elderly, following cardiovascular diseases, cerebrovascular diseases, and cancer.

A major risk factor for Alzheimer’s disease (AD) is mild cognitive impairment (MCI), a chronic neurodegenerative condition characterized by cognitive deficits that fall between normal aging and dementia. Patients diagnosed with MCI face a significantly elevated risk of progressing to AD, with an annual conversion rate of approximately 6%–25%.

However, in research on chronic neurodegenerative diseases, numerous clinical cases have demonstrated poor therapeutic outcomes in the middle to late stages. Consequently, in recent years, researchers have increasingly shifted their focus toward early diagnosis and preventive interventions for these conditions.

Traditional medical interventions for patients with cognitive impairment typically require substantial time, manpower, and financial resources, imposing significant cost pressures on healthcare institutions. Digital therapeutics leverage digital technologies to translate established medical principles, clinical guidelines, or standard treatment protocols into software-driven interventions. This approach effectively enhances patient adherence to and accessibility of chronic disease management, representing an innovative method that overcomes the limitations of conventional pharmacotherapy.

The Disruption of Technology in the Healthcare Industry Has Never Ceased. The Emergence of VR and AI Has Also Made More People Aware of a Novel Intervention Approach for Dementia.

Theoretically, VR technology can improve cognitive and routine functions by stimulating patients’ brains through the creation of virtual environments, while providing short-term feedback based on individual performance. It enables patients to exercise within limited spaces, thereby reducing healthcare costs. This technology not only allows for precise control of the environment but also adjusts the difficulty level according to the patient’s skill level. Due to its accessibility and safety, it expands the scenarios in which patients can use the technology, facilitating the implementation of cognitive rehabilitation.

In recent years, VR has enabled burden reduction and efficiency improvement in medical fields such as neurology, psychiatry, surgery, and rehabilitation medicine by leveraging the powerful capabilities of immersive hardware combined with AI technology, thereby transforming subjective diagnosis and treatment into objective analysis. Consequently, a growing number of entrepreneurs are focusing on the “VR + Healthcare” sector, including Hangzhou Xuzhishi Technology Co., Ltd. (hereinafter referred to as “Xuzhishi”).

Nine years ago, Kang Cheng, then an undergraduate student at Shandong University, secured an internship at a company in the eastern United States, where he was first exposed to virtual reality (VR) technology and developed a strong interest in its applications. During his internship, Oculus launched the world’s first consumer-grade VR headset, the Oculus Rift DK1, which achieved immediate widespread acclaim. This experience helped Kang recognize the potential of VR and reignited his deep-seated passion for technological innovation.

After graduation, Kang Cheng began exploring the applications of VR technology across various scenarios.

Initially, Kang Cheng attempted to implement technology within a large conglomerate, but the efforts did not go smoothly. The characteristics and maturity level of VR meant that while there were many potential integration points, most addressed only superficial needs rather than critical pain points. In 2016, seeking greater autonomy in pursuing VR innovation, Kang Cheng established Xuzhishi Technology. However, during its early stages, the team focused on education and government-related businesses to ensure the company’s survival.

In the process of providing services to the education sector, Xuzhishi Technology frequently undertakes requests for VR-based psychology courses, which help teachers assess students' mental health status and enable timely feedback, prevention, and counseling. After extensive discussions with many friends and colleagues in the field of psychiatry and psychology, Kang Cheng recognized the high compatibility between VR and mental health care, prompting him to embark on explorations into the integration of VR with psychiatric and psychological applications.

The gradual expansion from education to healthcare is clearly inseparable from the technical accumulation and support of the team members.

It is reported that the CTO of Xuzhishi Technology previously led an international R&D team at a renowned domestic AI healthcare company. Other core team members possess 10 to 20 years of experience in fields such as AI healthcare, virtual reality (VR), mental health and psychology, and medical device enterprise operations. The company’s expert advisory board comprises academicians and professors from prestigious medical schools, laboratories, and research institutions worldwide, as well as senior psychiatric specialists from hospitals, thereby providing robust support for product development and project advancement.

Due to its advantages such as realistic immersion, intuitive effectiveness, repeatability, and suitability for remote therapy, VR can play a significant role in the auxiliary diagnosis, efficacy evaluation, and therapeutic rehabilitation of psychiatric and psychological disorders. Furthermore, compared with traditional exposure therapies (such as in vivo exposure and imaginal exposure), VR-based virtual reality exposure therapy offers greater controllability, allowing for the pre-setting of intensity and session frequency, while also enabling more timely data acquisition.

Furthermore, virtual environments generated through computer technology enable sensory interaction between patients and physicians. While patients experience a high degree of realism, clinicians can monitor their psychological status in real time, thereby facilitating the development of more targeted treatment plans and enhancing the efficacy of mental health interventions.

By integrating AI technologies, the product can leverage recommendation algorithms and deep learning to create personalized treatment plans for each individual, thereby harnessing the advantages of technology in enhancing both efficiency and efficacy.

Existing clinical studies have shown that patients exhibit significant improvements in cognitive function after undergoing VR training. Rehabilitation training can facilitate the restoration of normal functions, enhance patients' information processing capabilities, and achieve maximal recovery of cognitive function.

Currently, Xuzhishi Technology’s products are primarily focused on the treatment of Mild Cognitive Impairment (MCI) and Alzheimer’s Disease (AD). It is reported that the cognitive function rehabilitation system employed by Xuzhishi Technology successfully obtained certification from the National Medical Products Administration (NMPA) at the end of last year, making it the only VR-based psychiatric and psychological rehabilitation training system currently approved by the NMPA in China.

This system leverages immersive VR scenarios and task-based guidance to help users train across seven cognitive domains, including memory, attention, and executive function. By enhancing user engagement, the system ultimately aims to improve users’ cognitive functional status.

Xuzhishi Technology's Cognitive Rehabilitation System: Simulated Supermarket Scenario

In addition, the cognitive rehabilitation system features a console module designed to meet user needs, facilitating patient behavior management and training data management for medical staff, as well as enabling command control of VR devices, thereby maximizing healthcare professionals' work efficiency.

Meanwhile, leveraging feedback data from the clinical application of existing products, the Xuzhishi Technology team can continuously optimize and iterate its algorithms, thereby feeding back into clinical practice and establishing a closed-loop evolution for its VR products.

In terms of application scenarios, Xuzhishi Technology has not only applied VR technology to the rehabilitative treatment of dementia but also extended its use to fields such as rehabilitative training for children with autism, aiming to reduce the costs of traditional manual interventions and improve intervention efficiency.

Furthermore, Kang Cheng views digital therapeutics as a breakthrough in the treatment of psychiatric and psychological disorders. Xuzhishi Technology’s VR-based cognitive rehabilitation system is, in essence, a digital therapeutic that meets key criteria, including a comprehensive theoretical framework, an evidence-based medicine foundation, and improved patient adherence. Moving forward, Xuzhishi Technology will continue to deepen its engagement in the digital therapeutics sector, exploring optimal solutions for cognitive rehabilitation.

In terms of market deployment, Xuzhishi Technology primarily provides products and services to psychiatric and psychological departments in general hospitals, specialized psychiatric hospitals, and nursing homes. Its solutions are currently in routine clinical use and covered by medical insurance reimbursement at more than ten hospitals across China, and the company has been included in the procurement plans for the coming year at nearly 100 hospitals.

In the future, Xuzhishi Technology will attempt to open up the consumer market by developing VR rehabilitation training products and early screening and intervention products suitable for home use.

Given that consumer users generally have limited awareness of VR rehabilitation training systems, the team will continuously strengthen market education during this process to enhance public recognition of the product.

In line with the company’s future development strategy, Xuzhishi Technology has initiated the FDA submission process for its VR Cognitive Rehabilitation System and is concurrently developing VR-based rehabilitation training products for autism in both China and the United States.

In terms of product development, Xuzhishi Technology plans to explore the field of brain science and integrate brain-computer interface (BCI) and electroencephalogram (EEG)-related technologies, bringing more advanced and innovative technologies into its products. Meanwhile, Xuzhishi Technology also seeks to collaborate with capital partners who share aligned values, jointly advancing product R&D and commercialization.