Neuralink, an invasive BCI company with a short-term goal of treating various neurological disorders such as quadriplegia, was founded by Elon Musk in 2016 with the intention of creating another “layer” to the brain to complement the functions of existing layers like the limbic system and the cortex. Musk is known for his success with previous hard tech startups like Tesla, OpenAI, The Boring Company, and SpaceX.

Founding Date

Jan 1, 2016

Headquarters

Fremont, California

Total Funding

$ 686M

Stage

secondary market

Employees

251-500

Careers at Neuralink

Memo

Updated

September 6, 2024

Reading Time

24 min

Thesis

The history of brain-computer interfaces (BCIs) dates back to 1924 with Hans Berger's discovery of human brain electrical activity through electroencephalography. However, in-depth BCI research started in the 1970s at UCLA. It was spearheaded by Professor Jacques Vidal, who also coined the term "brain-computer interface." In 1998, a breakthrough came when Phillip Kennedy implanted the first invasive BCI in a human.

Subsequent advancements include John Donoghue's introduction of the initial BCI game, "BrainGate," in 2003. In 2004, Matt Nagle became the first to receive an implanted invasive BCI system, offering promise to individuals with quadriplegia. After this, the 2000s witnessed a surge in BCI research, culminating in two seminal studies published in Nature in 2012 demonstrating how BCI systems could enable neural arm control and the restoration of arm movements following paralysis.

Brain-computer interfaces encompass three distinct categories: non-invasive, partially invasive, and invasive. Electroencephalograms (EEGs) are an example of non-invasive BCIs. They offer affordability and ease of use without necessitating surgery. However, their potential is constrained by the skull's signal-blocking nature, resulting in weaker signals.

On the other hand, invasive BCIs demand surgical implantation within the patient's head and entail higher risks. The benefit is that they can capture neuronal activity with better signal quality. This gives them the potential to help treat neurodegenerative ailments like paralysis, epilepsy, brain injury, amyotrophic lateral sclerosis (ALS), Parkinson’s disease, and Alzheimer’s disease. This could impact a huge number of people: as of 2007, one in six of the world’s population suffered from neurological disorders. As the global population continues to age, the demand for invasive BCIs and their potential applications is likely to rise with an increasing number of patients grappling with neurodegenerative disorders.

Neuralink, an invasive BCI company with a short-term goal of treating various neurological disorders such as quadriplegia, was founded by Elon Musk in 2016 with the intention of creating another “layer” to the brain to complement the functions of existing layers like the limbic system and the cortex. Musk is known for his success with previous hard tech startups like Tesla, OpenAI, The Boring Company, and SpaceX. As Musk put it in a 2017 interview:

“We already have a digital tertiary layer in a sense, in that you have your computer or your phone or your applications. You can ask a question via Google and get an answer instantly. You can access any book or any music. With a spreadsheet, you can do incredible calculations…The thing that people, I think, don’t appreciate right now is that they are already a cyborg.”

Neuralink seeks to accelerate this trend by turning human-computer interfaces into something more direct than current computing interfaces allow, namely through a BCI. Neuralink is one of the few companies that have conducted human BCI trials, with its first human trial in September 2023, the first BCI implantation in January 2024 followed by a second implantation in August 2024, and 10 others to begin trials by the end of 2024. Neuralink has the opportunity to provide potential life-altering applications of BCIs at scale for the first time.

Weekly Newsletter

Subscribe to the Research Rundown

Founding Story

Neuralink was founded in 2016 by Elon Musk. Musk reportedly met with over 1K potential candidates before deciding on the founding team of Neuralink. The eight members of the founding team who joined Musk were Max Hodak, Benjamin Rapoport, Dongjin Seo (VP of Engineering), Paul Merolla, Philip Sabes, Tim Gardner, Tim Hanson, and Vanessa Tolosa. Hodak served as the President of Neuralink from inception through early 2021. As of 2024, Jared Birchall is the CEO of Neuralink. Birchall also works at the Musk family office Excession LLC as its managing director.

In January 2017, the company acquired the trademark "Neuralink" from neuroscientists Pedram Mohseni and Randolph Nudo. In April 2017, Neuralink was launched with a mission to develop advanced brain devices for treating significant brain-related illnesses. Beyond this immediate goal, Neuralink's long-term vision centers around merging human will with AI computing ability, which Musk believes will mitigate the risk of hostile artificial general intelligence (AGI) through increasing human-to-AI bandwidth. Musk was inspired by the science fiction concept of neural lace portrayed in Iain M. Banks' The Culture series.

Initially headquartered in San Francisco's Mission District, Neuralink later moved its base to Fremont, California. As of August 2024, Neuralink has switched its state of incorporation from Delaware to Nevada and begun construction of offices in Del Valle, an unincorporated area near Austin, Texas, reflecting Musk’s desire to move his companies to Texas. The short-term goal of the company is to solve debilitating brain and central nervous system ailments and in the long term, the company aims to create a generalized platform for the brain and achieve alignment with artificial general intelligence.

Product

Neuralink’s product is a wireless fully implanted BCI. It can be broken down into three basic parts: an implant, a surgical robot, and an app. Elon Musk described the Neuralink product in a 2020 Neuralink livestream as “kind of like a Fitbit in your skull with tiny wires.” Though the combined product is known as “Telepathy,” the N1 implant is known as the "Link.” This neural chip, the size of a coin, is surgically placed under the skull and is equipped with electrodes for recording and emitting electrical currents. It connects to neural threads distributed across different sections of the brain responsible for motor skills. The technology aims to decode and stimulate brain activity, enabling direct communication between human brains and computers.

Neuralink's primary goal is to facilitate communication between the brain and computers. By recording and decoding neural signals from individual neurons and then transmitting them back to the brain using electrical stimulation, the chip enables users to control devices solely through thought. This technology holds the potential to restore movement for individuals with paraplegia and grant vision to those born blind. To facilitate the intricate surgical process, Neuralink has developed a neurosurgical robot designed for full automation. Through increasingly complex and physically smaller Neuralink implants, automated surgical robots, and an integrated software platform, the company aims to make seamless brain-computer interfaces accessible and practical for general use.

Source: Neuralink

N1 Implant

The N1 Implant is a fully implanted neural recording and data transmission device with ~1K electrodes. According to the whitepaper published in 2019, previous versions of the link consisted of a panel of microchips, a battery, and ~3K electrodes distributed along neural threads thinner than human hair. The N1 Implant is intended to replace a piece of skull once implanted and would be completely invisible and able to transmit data wirelessly.

Source: Neuralink

In a 2020 product update, the N1 Implant became capable of capturing over 1K channels of information, with each channel transmitting data at a rate of 200 megabits per second. The device's size also shrank to that of a large coin, measuring 23 millimeters in width and eight millimeters in thickness. Additionally, all the wiring that was earlier required to connect the electrodes was condensed to within a centimeter of the device itself. Close to 10 N1 Implant interfaces can be placed in a single brain hemisphere.

Biocompatible enclosure: The N1 implant is sealed in a biocompatible enclosure that can withstand physiological conditions several times harsher than those in the human body.

Source: Neuralink

Battery: The N1 implant is powered by a small battery that can be charged wirelessly from the outside via a compact, inductive charger. The implant’s battery has a one-day battery life.

Source: Neuralink

Chips & Electronics: Advanced, custom, low-power chips process neural signals, transmitting them wirelessly to the Neuralink application, which decodes the data stream into actions and intents.

Threads: The N1 implant contains arrays of flexible electrode threads with up to ~1K electrodes per array distributed across 64 threads. These highly flexible, ultra-thin threads are key to minimizing damage during implantation and beyond. The threads are 4 to 6 μm in width, which makes them considerably thinner than human hair.

R1 Surgical Robot

The threads of the N1 implant are so fine that they can't be inserted by the human hand. Therefore, Neuralink built the R1 surgical robot to reliably and efficiently insert these threads exactly where they need to be. The surgery that inserts the implant is bloodless, as the sensors in the robot guide the cutting blades so they avoid rupturing any blood vessels. The robot is capable of inserting six threads (192 electrodes) per minute. As one Neuralink VP described it:

“It’s capable of maneuvering these tiny threads that are only on the order of a few red blood cells wide and inserting them reliably into a moving brain while avoiding vasculature.”

Source: Card79

To prepare for the procedure, a functional magnetic resonance imaging (fMRI) study is performed to determine which regions of the participant’s brain are most active when they move their hand and arm. This fMRI data is then used to locate the target zone on the participant’s precentral gyrus, a cortical region associated with executing hand movements. During the surgery, a neurosurgeon exposes the target region of the cortex, and the R1 Robot performs the insertions of the N1 implant threads, with the neurosurgeon mounting the N1 implant and closing the scalp. The entire process of getting the implant surgery should take place in less than an hour without the need for any general anesthesia, and the patient will be able to be discharged the same day.

Source: Neuralink

Neuralink Application

Once implanted, the N1 implant wirelessly transmits the electrical signals it receives from the user to an instance of the Neuralink Application running on an external device. The Neuralink Application decodes and translates this neural data from the N1 implant into actions on the device, allowing the user to teleoperate the chosen mobile or platform device. By transmitting the electric signals wirelessly, the N1 implant is cosmetically invisible and used without any physical connectors to external devices.

Source: Ness Labs

Market

Customer

Neuralink does not have any customers yet as it is awaiting approval and is still in clinical trials. The implant is yet to be approved by the FDA for general use, although Musk stated in an April 2024 interview that he believed it would be able to achieve approval for general use within 1-2 years. If approved, the company will start implanting the link in people with paralysis, as Elon Musk stated in 2021:

“[The] first Neuralink product will enable someone with paralysis to use a smartphone with their mind faster than someone using thumbs”

The initial applications envisioned for Neuralink are to assist individuals with paralysis in utilizing their electronic devices and to provide vision restoration for those experiencing blindness. Later versions, according to Musk, will be able to “shunt signals from Neuralinks in [the] brain to Neuralinks in body motor/sensory neuron clusters, thus enabling, for example, paraplegics to walk again.” In May 2024, Musk described the company’s next application as follows:

“The next product is Blindsight, which will enable people who have lost both eyes or have no eyesight whatsoever to see…and this is directly interfacing with the optical processing areas of the brain.”

Musk has also described a second-generation Neuralink product that would be able to facilitate interaction between both brain hemispheres and computers:

“A possible second Neuralink [version]… would allow [the] other brain hemisphere to interact telepathically with [a] computer. This would be like having two-handed control ability, the equivalent of mouse and keyboard.”

Musk believes that Neuralink will ultimately become a commercial product intended to address major injuries by, for example, replacing lost human limbs by providing access to teleoperated Optimus robot limbs from Tesla. However, he stated in April 2021 that the company’s ultimate goal would be the “symbiosis of human & machine intelligence.”

Market Size

The global BCI market was valued at $2 billion in 2023 and is expected to grow at a CAGR of 17.8% to $6.2 billion by 2030. Market growth will likely be driven by improvements in technology, along with the increasing prevalence of neurodegenerative conditions like Alzheimer's, Parkinson's, and epilepsy, along with the improvement of BCI technology and its expanding applications.

Medical BCIs are anticipated to play a crucial role in addressing neurodegenerative conditions in the near future. According to the World Health Organization (WHO), the number of people living with dementia in 2017 was expected to more than triple from 50 million to 152 million by 2050, with 10 million additional cases annually. 2019 WHO estimates find that dementia costs global economies $1.3 trillion, with approximately 50% of costs attributable to care provided by informal care providers (e.g. family members and close friends), who provide on average 5 hours of care and supervision per day. In addition, the WHO estimated in 2013 that between 250K and 500K people suffer a spinal cord injury (SCI) every year. An updated 2021 WHO estimate finds that approximately 15.4 million people worldwide live with SCI. Approximately 1.7% of the US population was dealing with paralysis as of 2016.

The impact of paralysis on a person's ability to effectively use computers or smartphones is significant. This limitation underscores the potential of BCIs, as they could empower individuals with paralysis to interact with technology more seamlessly. Projections indicate that affluent nations could see approximately 50 million potential beneficiaries of BCIs for medical reasons by the year 2025. This suggests a growing demand for BCI technology to enhance the quality of life for individuals with various medical conditions, ranging from neurodegenerative disorders to paralysis.

Competition

Synchron: Founded in 2012, Synchron is a primary competitor to Neuralink. The company has developed an endovascular brain-computer interface that can access every corner of the brain using blood vessels. Its device, Stentrode, is placed in a vein alongside the motor cortex and is designed to enable patients to wirelessly control digital devices. In 2020, Stentrode received a Breakthrough Device Designation from the FDA. In 2021, Synchron received an FDA Investigational Device Exemption to conduct trials of permanently implantable BCIs. In February 2024, Synchron acquired a minority equity stake in the medical device manufacturer Acquandas, giving the company exclusive access to Acquandas’ layering technology for medical devices.

In July 2024, the company integrated OpenAI’s ChatGPT model into Synchron’s new chat feature for improved patient communication. As of August 2024, the company had implanted its device in 10 people. As of September 2024, the company had raised $145 million in total funding. In December 2022, the company raised a $75 million Series C led by ARCH Venture Partners. Other notable investors include Bill Gates and Jeff Bezos through their respective family offices, Khosla Ventures, Greenoaks Capital Partners, and the U.S. Department of Defense.

Blackrock Neurotech: Founded in 2008 and headquartered in Salt Lake City, Blackrock Neurotech is the earliest and most widely studied BCI with over 1.7K published studies and 19 years of human studies. The company is backed by Peter Thiel, who invested $10 million in 2021. The company’s core technology is based on Utah Array, a BCI that was first implanted in humans in 2004. The company’s device also received a breakthrough designation from the FDA in 2021.

The company claimed to have already installed its BCI in 31 patients across the world as of April 2022. However, Neuralink’s implant can, reportedly, capture more brain cell activity at multiple points and is wireless, whereas Blackrock Neurotech’s device captures activity at a single point and has wires. The company has raised $10 million in total funding, which is raised in a 2021 financing round. Other notable investors include Tether, Catalio Capital Management, the National Science Foundation, and the U.S. Department of Health and Human Services

Kernel: Founded in 2016, Kernel is building technology for non-invasively measuring the brain and building biomarkers. Kernel’s combination of hardware and software allows researchers to conduct advanced neuroscience studies without requiring large equipment such as an MRI machine. Kernel’s Neuroscience-as-a-Service (NaaS) model has two components. Flux detects magnetic fields created by the collective activity of neurons in the brain (i.e. magnetic flux). Flow detects cortical hemodynamics, which is representative of neural activity (i.e. blood flow). In 2020, Kernel raised a $53 million Series C led by General Catalyst, bringing its total funding to $153 million. Other notable investors include Khosla Ventures, Calm Ventures, and Eldridge Industries.

CTRL-labs: Founded in 2015, CTRL-labs is a New York-based company that developed a wristband that translated neuromuscular signals into machine-interpretable commands. CTRL-labs's flagship product was the CTRL-kit, a wireless, non-invasive electromyography (EMG) device that translated neural signals into control. The CTRL kit was designed to be used for a variety of applications, including gaming, productivity, and healthcare. The company was acquired by Meta in 2019 for between $500 million and $1 billion. Andrew Bosworth, Facebook’s head of AR, explained the vision for its product under Meta:

“Here’s how it’ll work: You have neurons in your spinal cord that send electrical signals to your hand muscles telling them to move in specific ways such as to click a mouse or press a button.”

Neurable: Founded in 2015, Neurable is a Boston-based company spun out from the University of Michigan’s Direct-Brain Interface Laboratory (UM-DBI). The company is working on building an “everyday” BCI. The company came up with smart headphones that have soft EEG sensors woven into the ear cushions. These headphones can detect patterns in brain activity with near lab-grade precision which allows users to control their smartphones, computers, and other devices with their thoughts. Its devices also measure brain activity to generate simple, real-time insights. In April 2023, Epson Corporation invested an undisclosed amount in Neurable. In 2024, Neurable raised $13 million in a financing round led by Ultratech Capital Partners, bringing its total funding to $31 million as of September 2024. Other notable investors include: Innospark Ventures, GoAhead Ventures, NXT Ventures, and the National Science Foundation.

Paradromics: Founded in 2015, Paradromics is an Austin-based brain-computer interface (BCI) company that is working on bringing to market a direct data interface with the human brain, which is intended to provide technology solutions to unmet medical needs. Its first clinical application is an assistive communication device that caters to patients who have lost the physical ability to speak or type. In 2023, Paradromics raised $50 million in a combination Series A-1 and Series A-3 led by Prime Movers Lab, bringing its total funding to $97 million, split between $70 million in venture investment and $18 million in public funding via NIH and DARPA. Other notable investors include: Capital Factory, FJ Labs, and Dolby Family Ventures.

Neucyber: In April 2024, a Chinese company called Beijing Xinzhida Neurotechnology publicly revealed Neucyber, which some were calling “China’s version of Neuralink”. The majority shareholder in the company is the Beijing municipal government, and it was reportedly tested on a monkey who was able to control a robotic arm with the company’s technology using its thoughts. The company had yet to begin human trials as of April 2024 but aims to begin early next year.

Business Model

While Neuralink is still in the research stage and has not deployed a product, the company has mentioned that the implant will be quite expensive at the beginning and anticipates that costs will decline rapidly from there to settle in the range of a few thousand dollars, including the cost of the robotic surgery. Musk compared the Neuralink implantation surgery to LASIK (refractive eye surgery) which cost $2.4K to $3.2K per eye in the US as of 2023.

Traction

In 2017, the company partnered with the University of California, Davis’s California National Primate Research Center (CNPRC) to conduct animal-based research. In 2020, they opened a vivarium for housing farm animals and rhesus macaques. In 2020, Neuralink also received FDA breakthrough device designation for limited human testing.

In August 2020, the company demonstrated its BCI devices in a pig named Gertrude for two months. The devices were implanted in the part of its brain that controlled the snout and showed real-time correlations between neural signals and Gertrude's snuffling. In April 2021 the company released a video of Pager, a nine-year-old Macaque, playing MindPong with a Neuralink device implanted in both sides of its brain.

In May 2023, the company received approval from the FDA to launch its first-in-human clinical “PRIME (Precise Robotically IMplanted Brain-Computer InterfacE)” study, which was a notable moment when approval had previously been rejected. This trial began in January 2024, when the first human successfully received a Neuralink implant. The patient, Noland Arbaugh, was a 29-year-old who had been paralyzed from the neck down from a swimming accident 10 years ago, and the Neuralink implant enabled him to control a cursor and engage in hobbies like gaming.

In April 2024, Neuralink announced that it was partnering with Arizona-based Barrow Neurological Institute to kick off a clinical trial for its N1 implant, following the announcement of its first successful human trial in January 2024. In May 2024, Neuralink received FDA approval to implant a chip in a second patient. In August 2024, implantation into the second patient was successfully performed. Notably, Neuralink electrode retraction is considered a major obstacle to the continued efficacy of the telepathy device post-implantation. A month after the operation, Arbaugh was notified by the company that up to 85% of the electrodes implanted had retracted and were no longer transmitting the neurons’ electrical signals.

Source: Neuralink

Software changes performed by the company have helped return device functionality and the FDA has approved Neuralink’s proposal to implant the device eight millimeters into the brain’s motor cortex in future patients, compared with the previous depth of three to five millimeters. Neuralink’s Head Neurosurgeon, Matthew MacDougall, explained the company’s thought process in a July 2024 live stream on X:

“You may think the most obvious mitigation for threads that pulled out of the brain is to insert them deeper. We think so too. So we’re going to broaden the range of depth to which we insert threads… now that we know retraction is a possibility, we’re going to insert at a variety of depths that even in several cases of different amounts of retracting threads we’re going to have electrodes at the proper depth, and with the deepest threads, be able to track how much retraction has occurred across the surface of the brain from each thread.”

Source: X

By the end of 2024, the company intends to have 10 other patients implanted with its device. Elon Musk stated in an April 2024 interview that he believed that Neuralink would be able to achieve approval for general use within 1-2 years. As of August 2024, Neuralink's study is estimated to have a primary completion date of 2026, with the full study expected to be complete in 2031.

Valuation

In August 2023, Neuralink raised a $280 million Series D at an estimated $3.5 billion, led by Founders Fund. As of August 2024, the company had raised a total of $687 million in funding. Other notable investors in Neuralink include Google Ventures, Valor Equity Partners, Draper Fisher Jurvetson, Sam Altman, and Blake Byers. As of August 2024, privately executed stock trades pinned the company’s valuation at $7.8 billion. The company’s continued markups are typically driven by key milestones in the company’s clinical testing trials, such as Neuralink’s second human implantation in August 2024, following the inaugural human implantation in January 2024, and prior FDA approval for conducting human clinical trials in June 2023.

Key Opportunities

Technological Advancements

Computational and sensor technology advancements are expected to drive growth in the BCI market. Over the past few years, the industry has seen improvements in not just the accuracy of brain-wave sensors but also in the quality of signal detection. To put things into perspective, BCI systems that existed before Neuralink have no more than 256 electrodes, with connectors that pass through the skin, requiring medical assistance to connect the BCI. Neuralink, by contrast, has over 3K electrodes per array. Neuralink also claims that the analog pixels are at least 5X smaller than other state-of-the-art devices.

Medical Applications & Regulatory Changes

Neuralink’s primary near-term objective is to provide BCI medical devices for people who have serious physical impairments. Ongoing research focused on developing treatments for critical conditions such as brain and spinal disorders, sleep disorders, cerebrovascular diseases, and mental illness is also anticipated to contribute to the expansion of the BCI market.

The regulatory environment is adapting to reflect the growing interest in BCI medical devices. For instance, Abbott obtained an FDA Breakthrough Device Designation for a deep brain stimulation system for treating depression. The NIH also provides grants to BCI companies as part of its BRAIN initiative (Brain Research through Advancing Innovative Neurotechnologies) which was set up in 2013. The overall funding limit for 2023 through this initiative is around $680 million.

A 2010 report on the FDA’s execution of authority over the regulation of medical devices in the US concluded that the FDA’s “unpredictable, inefficient, and expensive regulatory processes are jeopardizing America’s leadership position in MedTech innovation”. However, the FDA has since evolved its stance on neural device development.

The FDA released a BCI guidance document in May 2021 entitled “Implanted Brain-Computer Interface (BCI) Devices for Patients with Paralysis or Amputation’”, acknowledging the potential benefits of implanted BCI devices for people with severe disabilities. To facilitate market access, the FDA established its “Breakthrough Devices Program”, which makes it mandatory for the FDA to respond to human-trial applications in under 30 days and thereby reduces the total time companies spend seeking agency approvals.

Non-Medical Commercial Applications

In the long term, Neuralink aims to move beyond purely medical applications to bring later iterations of its implant to the general public. Neuralink could enable users to interact with digital devices directly, bypassing traditional user interfaces like keyboards and touchscreens. For example, individuals could use their wirelessly transmitted thoughts to control computers, smartphones, and other smart devices, leading to faster and more efficient interactions. Effective BCIs capable of P2P communication could practically enable what Musk describes as consensual telepathy:

“If I were to communicate a concept to you, you would essentially engage in consensual telepathy. You wouldn’t need to verbalize unless you want to add a little flair to the conversation… but the conversation would be conceptual interaction on a level that’s difficult to conceive of right now.”

If successfully implemented, Neuralink could impact how we share thoughts and ideas, enabling communication less limited by human interpretation of emotions, where direct, conceptual, and emotional experience exchanges can take place directly. Musk believes that by bypassing the physical limitations of human communication through Neuralink’s increased translational processing power, true human communication can take place:

"If you’re [communicating] anywhere at 10,000 bits per second, that’s vastly faster than any human can communicate right now…and now, even if you’re communicating very quickly…you have to at least to some degree, model the mind state of the person to whom you’re speaking. Then take the concept you’re trying to convey, compress that into a small number of syllables, speak them, and hope that the other person decompresses them into a conceptual structure that is as close to what you have in your mind as possible."

Key Risks

Founding Team Exits

So far, six out of its eight founding members have left Neuralink. In 2021, Max Hodak, who was Neuralink's co-founder and president, left the company. The departure of so many founding members and also key employees is a cause for concern for Neuralink. It could signal that the company is facing internal problems, or that it is not meeting initial expectations. Ex-Neuralink employees have claimed that there is frequently intense pressure to deliver on unrealistic timelines, which may be contributing to employee dissatisfaction. There are also reports of Musk investing in its primary competitor Synchron amidst the delays in regulatory approval.

Crowded Market

Though Neuralink operates with a comparative advantage in terms of media exposure, given Elon Musk’s celebrity, as well as greater funding compared to competitors, the race to successful device commercialization and broad regulatory approval remains competitive in the BCI market.

For instance, as of August 2024, competitors Blackrock (40 implants), BrainGate (15 implants), and Synchron (10 implants) have all successfully implanted more devices into patients compared with Neuralink’s total of two people. However, even as go-to-market speed remains top of mind, each company takes different views of the right approach (non-invasive, partially invasive, and invasive) and long-term applications (solving disabilities, public commercial use, AI-human synthesis) for BCI interfaces.

Hardware Safety & Cybersecurity

Regulatory risks surrounding Neuralink primarily revolve around significant safety concerns associated with the device flagged by the FDA. These concerns include the device’s lithium battery which can potentially damage brain tissue. There is also a possibility of the implant's miniature wires migrating to unintended areas within the brain and uncertainties surrounding the safe removal of the device without causing damage to delicate brain tissue.

In May 2024, Neuralink’s first human patient reported that 85% of implant wires had become detached within a few weeks of the implant, a reportedly known issue to the company from animal testing. As implant wires detach from a patient’s brain, the efficacy of the device decreases as well, leading to lowered patient trust and regulatory incentives to approve future research and human clinical trials.

Further concerns remain over the potential of cybersecurity threats to Neuralink devices, whether designed to crack the hardware implant or software application. Similar concerns have been raised over the widespread security vulnerabilities of critical medical devices in general but both cybersecurity experts and the general public view the ever more precise control implants will have over user brains and actions as a pathway to insidious cybersecurity attacks. Complementing these issues are privacy worries that Neuralink and BCI devices would reveal user information and brain signals to unwanted outside parties. Researchers have proposed signal processing blocks involving blockchain technologies as a possible method to ensure data privacy and security.

Addressing these potential hazards and ensuring the device's safety and effectiveness will be pivotal for navigating the regulatory landscape and obtaining approvals for Neuralink's neural interface technology. It will also be important to address these issues to win public trust and adoption if the company can secure approval for general use.

Adoption Challenges

The utilization of BCIs for commercial purposes may encounter public skepticism. A survey says that 83% of Americans wanted implants to be tested using a higher standard than applies to medical devices. The general public also foresees adverse consequences stemming from the widespread adoption of brain chips for cognitive enhancement, expressing concerns about both economic disparities and cybersecurity vulnerabilities. A few states in the US have passed laws banning invasive microchips or other implants due to privacy concerns. However, when it comes to solving for people with medical ailments such as paralysis, 77% of Americans supported the use of BCIs.

Weekly Newsletter

Subscribe to the Research Rundown

Summary

Drawing inspiration from the historical evolution of brain-computer interfaces (BCIs), Neuralink aims to bridge the gap between human cognition and artificial intelligence. By integrating BCIs into the human brain, Neuralink wants to create a future where paralysis is no longer a barrier to movement and communication, where mental health afflictions find new avenues of treatment, and where human’s understanding of the brain's intricacies deepens beyond measure.

However, as with any innovation, there are challenges. Having secured ample funding and clinical trial approval, Neuralink is at the forefront of the effort to create commercially viable BCIs. These interfaces seek to address medical conditions that have remained unsolved by conventional pharmaceutical approaches and have the potential to revolutionize human-to-human and human-computer interactions forever.

Disclosure: Nothing presented within this article is intended to constitute legal, business, investment or tax advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Contrary LLC (“Contrary”) nor does such information constitute an offer to provide investment advisory services. Information provided reflects Contrary’s views as of a time, whereby such views are subject to change at any point and Contrary shall not be obligated to provide notice of any change. Companies mentioned in this article may be a representative sample of portfolio companies in which Contrary has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Contrary. No assumptions should be made that investments listed above were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results. A list of investments made by Contrary (excluding investments for which the issuer has not provided permission for Contrary to disclose publicly, Fund of Fund investments and investments in which total invested capital is no more than $50,000) is available at www.contrary.com/investments.

Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by Contrary. While taken from sources believed to be reliable, Contrary has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Please see www.contrary.com/legal for additional important information.

Authors

Rahul Konapur

Fellow

See articles

Alexander Zou

Fellow

See articles

© 2024 Contrary Research · All rights reserved

Privacy Policy

By navigating this website you agree to our privacy policy.