What is BrainCo, the Chinese startup taking on Neuralink in brain computer interfaces?

The battle for technological supremacy between the US and China is often reduced to artificial intelligence (AI) and semiconductor supply chains. However, another frontier is rapidly emerging in this geopolitical contest, that could be just as consequential: brain computer interfaces (BCI).

BCIs essentially process brain signals and translate them into commands. This allows users to control external devices by thought. This type of neuratech is still in its infancy, with BCI-focused startups drawing only a fraction of the funding that has flooded into AI.

But the technology has advanced steadily, with recent breakthroughs enabling people with chronic health conditions such as amyotrophic lateral sclerosis (ALS) to type, communicate, and even play video games using only their brain signals. Elon Musk-owned Neuralink is widely considered for putting BCIs in the global spotlight by developing implantable devices that help people with neurological conditions regain lost functions.

Now, a new wave of neuratech startups are looking to challenge Neuralink by betting that the future of mass market neural tech lies in non-invasive devices, rather than brain implants, that do not require opening the skull at all. One such startup at the forefront of this new push for non-invasive BCIs is China’s BrainCo.

What is BrainCo? What products does it make?

Founded in 2015, BrainCo is a neuratech startup spun out of the Harvard Innovation Labs. It is based in the eastern Chinese city of Hangzhou and is part of the country’s official “six little dragons” grouping of tech startups.

BrainCo’s bionic hands. (Image: BrainCo)

BrainCo develops prosthetics and wearable devices using BCI technology. Its approach to BCI development is firmly rooted in non-invasive tech.  Nyx He, BrainCo partner and senior vice president, believes that while some neurological conditions can only be addressed by going into the brain, many other use cases can be served by non-invasive methods that are not only lower risk and more affordable but also easier for people to accept and access.

The startup has developed a range of BCI-centric products so far, ranging from bionic hands to sleep aids. Recently approved by the US Food and Drug Administration, BrainCo’s bionic hands work by reading an amputee’s neural and muscular electrical signals and translating the intended movements into finger motions.

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The firm’s bionic hands business is “already seeing much bigger growth compared to last year,” He was quoted as saying in a Bloomberg report last month.

Meanwhile, BrainCo’s sleep aid uses low-intensity electrical pulses to stimulate neurochemicals associated with stress relief, according to the company. It has also developed a headset that tackles neurological disorders ranging from autism and ADHD to insomnia through BCI.

BrainCo is also developing a BCI-centric treatment that looks to replicate the appetite-suppressing effects that have made weight-loss drugs such as GLP-1 popular globally. The weight loss treatment is expected to hit the market in late 2027 or 2028, according to He.

“We are not just making hands. We believe BCI and embodied intelligence can combine and we think robots controlled by the human brain will be a focus going forward,” He was quoted as saying.

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BrainCo’s BCI-driven sleep aid. (Image: BrainCo)

Coming to its financials, BrainCo recently raised 2 billion yuan ($280 million) in a funding round co-led by IDG Capital and Walden International, the venture firm founded by Intel CEO Lip-Bu Tan.

What challenges does BrainCo face?

A key challenge to startups developing non-invasive BCI devices, is acquiring and decoding brain signals, which are reportedly subtle and noisy to read from outside the skull.

To address this problem, BrainCo developed a dry electrode sensor to capture the signals and uses an AI algorithm to decode them. In a report published on July 8, investment banking firm Jefferies said that conventional non-invasive BCI systems remain constrained by how clearly they can capture and interpret brain signals. It further highlighted invasive implants like Neuralink products and ultrasound-based systems as the “most promising” frontiers.

However, the report also mentioned that BrainCo’s proprietary sensors, AI decoding algorithm, and commercialisation record give the company an edge.

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While BrainCo is looking to start by catering to those who need BCI technology the most, such as amputees in markets covered by insurance, it also has plans of gradually expanding into treating medical conditions such as ADHD and depression. BrainCo also wants to target the mass market with consumer electronics.

It further plans to grow revenue by licensing its BCI platform to other companies building brain-tech products. In terms of security and privacy, BrainCo says that the company does not collect customer data which is stored on users’ devices. However, information such as concentration scores could be saved locally on its focus-training devices.

Where does China stand in the BCI race?

Besides BrainCo, several other Chinese startups such as StairMed, NeuroXess, and Gestala are pursuing BCI-powered devices. While StairMed and NeuroXess rely on brain implants, Gestala uses ultrasound-based approaches to offer a more holistic view of the brain without surgical risk.

Neuracle Medical Technology, another BCI startup, grabbed headlines recently after regulators approved what the company said is the world’s first minimally invasive BCI device for commercial use. The device is designed to help those with spinal cord injuries regain some hand function.

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In order to boost the industry overall and compete with American companies, the Chinese government declared BCI as a strategic “future industry” in its latest Five-Year Plan. In August 2025, seven Chinese ministries jointly issued an implementation plan for the BCI industry, targeting key technological breakthroughs by 2027. It has also lowered the regulatory and clinical barriers for non-invasive rehabilitation technologies.

The government is further enabling BCI startups to work with hospitals and universities, broadening access to patients and neurosurgeons. China’s health authorities also created a separate insurance category for BCI last year, which experts say could help to scale up the technology.