Zheshang Securities: Brain-Computer Interface Industry Series Report —— Insights from Neuralink

Neuralink's first product, Telepathy, is expected to enter mass production this year, with over 10,000 people having applied to experience it. Telepathy focuses on severely ill individuals with "normal brain function but disrupted motor/communication pathways," such as those with spinal cord injuries or ALS. Three key conditions for mass production — N1 performance improvement, enhanced surgical safety, and cost reduction: 1) By 2026, the number of electrodes in the N1 device is expected to increase from 1,000 to 3,000, enhancing neural signal reception. 2) For the surgical process, a future technique will directly pass through the dura mater surrounding the brain to implant electrode threads, reducing invasiveness, minimizing risks, and lowering infection concerns. 3) The second-generation device will increase the speed of electrode implantation from 17 seconds per electrode to 1.5 seconds per electrode. The cost of the needle kit will drop from $350 to $15. Smooth computer operation can be achieved within 15 minutes post-surgery.

As technology matures, brain-computer interfaces will no longer be limited to the medical field; they aim to enhance human communication efficiency and become part of everyday life for ordinary people. Neuralink is now valued at over $9 billion, with the company's vision being to increase communication bandwidth, improve communication efficiency, and connect the human brain with AI. In the future, assuming communication bandwidth becomes a bottleneck between biology and technology, ordinary people will use brain-computer interfaces to communicate with AI and control complex machinery. Merge Labs, a brain-computer interface startup co-founded by Sam Altman, has received $252 million in seed funding from OpenAI. The official statement from OpenAI emphasized: "Brain-computer interfaces are an important new frontier that will open up new ways for seamless and natural interaction between humans and AI." Musk hopes: "What we want to do is connect the collective will of humanity with the intelligent capabilities of AI."