OpenAI and cofounder Sam Altman are preparing to launch Merge Labs, a new company developing brain-computer interface (BCI) technology that will compete directly with Elon Musk’s Neuralink, according to multiple sources cited by Ars Technica and TechCrunch.

The new venture is raising funds at a reported $850 million valuation, with much of the capital expected to come from OpenAI’s ventures team. People familiar with the matter told both outlets that the talks are still at an early stage and that OpenAI has not yet committed to participation, meaning terms could change.

Altman is set to cofound the company but will not have a day-to-day operational role, sources said.

Merge Labs is reportedly working with Alex Blania, who runs Tools for Humanity—formerly known as World—an eye-scanning digital ID project also backed by Altman that aims to “allow anyone to verify their humanness.”

The name “Merge” refers to a concept popular in Silicon Valley: the merging of humans and machines. Altman discussed this idea extensively in a 2017 blog post, predicting the moment could arrive as soon as 2025. More recently, he suggested that “high-bandwidth brain-computer interfaces” could emerge from recent advances in AI and related technology.

Neuralink, founded by Elon Musk in 2016, develops computer interface chips designed for implantation in the brain. The company is currently conducting human trials with participants suffering from severe paralysis, aiming to let them control devices using their thoughts.

Neuralink raised $650 million this year at a $9 billion valuation. Backers include Sequoia Capital, Thrive Capital, and Vy Capital. Altman had previously invested in Neuralink before their rivalry deepened.

Musk and Altman cofounded OpenAI, but Musk left the board in 2018 after disagreements with Altman. Since then, their relationship has soured, with public disputes—most recently on X, where Musk called Altman a liar after Altman accused Musk of manipulating the platform.

BCI technology is not new—brain implants have existed for decades—but advances in artificial intelligence and signal-processing electronics have brought them closer to mainstream application. In addition to Neuralink and the emerging Merge Labs, other companies such as Precision Neuroscience and Synchron are also working in the field.

Altman has backed ventures in multiple high-tech sectors alongside OpenAI, including the nuclear fission company Oklo and the nuclear fusion project Helion.

OpenAI declined to comment on the new project.

Q: What is Merge Labs?
A: A brain-computer interface startup cofounded by Sam Altman that aims to compete with Neuralink.

Q: What is Merge Labs’ reported valuation?
A: Around $850 million, according to multiple sources.

Q: Who is Alex Blania and what is his role?
A: CEO of Tools for Humanity, working with Altman on Merge Labs.

Q: How is Merge Labs connected to OpenAI?
A: Much of its funding is expected to come from OpenAI’s ventures team, though the investment is not yet finalized.

Q: What stage is the project at?
A: Talks are early, and terms could still change before any formal launch.

The creation of Merge Labs signals a direct escalation in the rivalry between Sam Altman and Elon Musk, shifting their competition from AI software into brain-computer interface hardware. By tapping potential funding from OpenAI’s ventures team and partnering with Tools for Humanity, Altman is positioning the startup to enter a market where Neuralink has already established a technological and financial lead.

This move highlights how advances in AI are converging with neurotechnology, potentially accelerating the development of high-bandwidth connections between human brains and machines. Whether Merge Labs succeeds or not, the project underscores the increasing overlap between AI research, biotechnology, and human-computer integration—fields that are becoming central to Silicon Valley’s vision of the future.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.