Sam Altman takes on Neuralink with Merge Labs

If you thought the feud between Sam Altman and Elon Musk was confined to X spats and courtroom filings, get ready for round two: they are now taking their fight straight inside the human skull.

According to the Financial Times, Altman is in the process of co-founding a new brain-computer interface startup called Merge Labs. The new venture is aiming to challenge Musk’s Neuralink directly, with early capital potentially coming in large part from OpenAI’s own ventures arm. The startup is reportedly seeking an initial valuation of $850 million.

Nothing is officially signed yet. A source told TechCrunch that discussions remain in early stages, and OpenAI has not formally committed to writing a check, meaning the terms could still shift. OpenAI declined to comment.

Digging up an eight-year-old obsession

Merge Labs isn't just an Altman solo project. The effort reportedly involves Alex Blania, the head of Tools for Humanity, which runs Altman’s eyeball-scanning digital identity project formerly known as World.

For Altman, wiring computers into biological tissue isn't a new whim. Back in 2017, he published an essay titled The Merge on his personal blog, connecting the concept directly to what he was observing at OpenAI.

At the time, Altman argued that human-machine convergence was humanity's best-case scenario, writing that it could mean plugging electrodes into human brains or simply becoming close friends with chatbots. He predicted that humanity would become the first species ever to design its own descendants.

Back then, Musk was still sitting on OpenAI’s board. Since Musk’s departure in 2018, the relationship between the two tech titans has thoroughly collapsed. Just this week, the pair traded blows on X, with Altman accusing Musk of manipulating platform feeds and Musk shooting back by calling him a liar.

Now Merge Labs puts Altman in Musk’s backyard. Musk founded Neuralink back in 2016, and the company has already completed successful human trials allowing paralyzed patients to control computers with their thoughts. Just this past June, Neuralink closed a $600 million Series E round at a massive $9 billion valuation.

Why it matters

Don't expect to schedule an outpatient brain surgery anytime soon. Outside of clinical trials for severe paralysis, brain implants remain miles away from commercial consumer adoption, meaning Merge Labs won't change your daily routine this year.

For the tech landscape, however, this signals the opening of a brand-new front in the singularity race. Until now, the AI boom has focused on building digital minds inside server racks. Merge Labs and Neuralink are racing toward the biological hardware layer, trying to bypass the bottleneck of human fingers and screens.

We think this move shows Altman’s refusal to let Musk monopolize the transhumanist future. By tying together OpenAI's models, World's biometric infrastructure, and a BCI startup, Altman is quietly building an ecosystem designed for deep human-AI integration.

That said, slapping an $850 million tag on a company that hasn't even publicly launched looks exceptionally steep, relying almost entirely on founder hype. Given the intense regulatory and ethical scrutiny already facing Altman's eye-scanning ventures, pushing into invasive brain implants could turn out to be a regulatory minefield far messier than anything OpenAI has faced in software.