OpenAI invests in Sam Altman’s brain computer interface startup Merge Labs

Just when you thought circular deals couldn’t get any more circular, OpenAI has invested in CEO Sam Altman’s brain computer interface (BCI) startup Merge labs.

Merge Labs, which defines itself as a “research laboratory” dedicated to “bridging biological and artificial intelligence to maximize human power,” emerged from stealth on Thursday with an undisclosed seed round. A source familiar with the matter confirmed earlier reports that OpenAI wrote the largest check in Merge Labs’ $250 million seed round at an $850 million valuation.

Investment firms Bain Capital, Interface Fund and Fifty Years also participated in the raise, along with video game developer Gabe Newell. Seth Bannon, one of the founders of Fifty Years, wrote on X that Merge represents the culmination of the human effort to build tools that “expand ourselves and our capabilities.”

“Our individual experience of the world arises from billions of active neurons,” reads a statement from Merge Labs. “If we can interact with these neurons at scale, we can restore lost skills, support healthier brain states, deepen our connection with each other, and expand what we can imagine and create beyond advanced AI.”

Merge Labs said it plans to achieve these feats non-invasively by developing “entirely new technologies that connect to neurons using molecules instead of electrodes” to “transmit and receive information using deep modalities such as ultrasound.”

The move deepens Altman’s competition with Elon Musk, whose startup Neuralink is also developing computer interface chips that allow people suffering from severe paralysis to control devices with their thoughts. Neuralink currently requires invasive surgery for implantation, in which a surgical robot removes a small piece of skull and inserts ultra-fine electrode wires into the brain to read neural signals. The company last raised a $650 million Series E in June 2025 at a $9 billion valuation.

While there are undoubtedly medical use cases for BCIs, Merge Labs seems more focused on using the technology to make a Silicon Valley fantasy come true by combining human biology with AI to give us superhuman abilities.

“Brain computer interfaces (BCIs) are an important new frontier,” OpenAI wrote in one blog post. “They open up new ways to communicate, learn and interact with technology. BCIs will create a natural, human-centric way for everyone to seamlessly interact with AI. This is why OpenAI is participating in the Merge Labs seed round.”

In addition to Altman, other co-founders include Alex Blania (CEO) and Sandro Herbig (product and engineering lead) at Tools for Humanity, another Altman-backed company (and maker of the eye-scanning World orbs); Tyson Aflalo and Sumner Norman, co-founders of implantable neural technology company Forest Neurotech; and Mikhail Shapiro, a researcher at Caltech.

Blania and Herbig said separately posts on social media that they would continue their role at Tools for Humanity. Merge Labs did not confirm whether Alfalo and Norman would retain their positions at Forest Neurotech, saying only that the company would continue to operate and have a “great working relationship” with Merge. Shapiro plans to continue teaching at Caltech.

A spokesperson told TechCrunch that the co-founders are also board members of Merge Labs.

As part of the deal, OpenAI will collaborate with Merge Labs on basic science models and other groundbreaking tools to “accelerate progress.” In its blog post, OpenAI noted that not only will AI help accelerate R&D in bioengineering, neuroscience, and device engineering, but the interfaces will also benefit from AI operating systems that can “interpret intentions, adapt to individuals, and work reliably with limited and noisy signals.”

In other words, Merge Labs could function as a remote control for OpenAI’s software. That leads to the circular nature of the deal: If Merge Labs succeeds, it could drive more users to OpenAI, which in turn justifies OpenAI’s investment in the company. It also increases the value of a startup that Altman owns and uses resources from the company he leads.

OpenAI is also working with Jony Ive’s startup io, which it acquired last year, to produce a piece of AI hardware that doesn’t rely on a screen. Recently unconfirmed leaks suggest that the device may be an earbud.

OpenAI invests primarily through the OpenAI Startup Fund, which has invested in several other startups connected to Altman, including Red Queen Bio, Rain AI, and Harvey. OpenAI has also signed commercial agreements with startups that Altman personally owns or chairs, including nuclear fusion startup Helion Energy and nuclear fission company Oklo.

Altman has been dreaming about the “merger” – the idea that humans and machines will merge – since 2017, when he published an article blog post he guessed this would happen sometime between 2025 and 2075. He also speculated that the fusion could take many forms, including plugging electrons into our brains or “becoming really good friends with a chatbot.”

He said a merger is our “best-case scenario” for humanity’s survival against superintelligence AI, which he describes as a separate species in conflict with humans.

“Although the merger has already begun, things are about to get much stranger,” Altman wrote. “We will be the first species to ever engineer our own offspring. I suspect we can either be the biological bootloader for digital intelligence and then disappear into an evolutionary tree branch, or we can figure out what a successful fusion looks like.”

TechCrunch has reached out to OpenAI and Merge Labs for more information.

This article has been updated to confirm that the founders of Merge Labs will continue to work at their respective companies, and with more details about other fund participants.