Summary of Key Points
In 2026, the brain-computer interface (BCI) industry has seen a dramatic surge: it has evolved from a medical tool (used to assist paralyzed patients or treat epilepsy) to an essential component of AI infrastructure, serving as a “translator” between the human brain and artificial intelligence. In the first half of the year, domestic funding for BCI projects reached 5.3 billion yuan, accounting for nearly 60% of the total historical investment. Governments have also recognized this technology as a national strategic priority. Huachao Shenkong is a representative company in this trend, using ultrasonic technology to overcome the precision challenges associated with non-invasive BCIs. Their approach focuses on a complete “read-write-feedback” system. Huachao is not just a BCI company; they aim for a long-term vision of integrating AI with the human brain, investing in data collection, model development, and cutting-edge research. They balance short-term survival (focusing on scientific research and medical equipment) with long-term goals (such as developing AI-based hardware and exploring digital immortality). The competitive landscape is becoming blurred, with potential rivals being AI giants rather than traditional BCI companies.
1. The Transformation of the BCI Industry: From a Medical Tool to an Essential AI Component
BCIs were once niche medical solutions, used mainly for helping paralyzed patients control wheelchairs or treating epilepsy. However, in 2026, the situation has changed significantly. AI requires an understanding of human intentions—without the need for typing or speaking, it can directly interpret brain signals. BCI technology has thus transformed from a medical device to a fundamental component of AI infrastructure, attracting massive capital investment:
- In the first half of 2026, there were 47 BCI-related financings in China, totaling 5.3 billion yuan (almost 60% of all historical investments, exceeding the entire amount of 2025).
- Government support: BCI has been included in the “15th Five-Year Plan,” making it a national strategic initiative.
- Investors have diversified:不再是 just medical funds; technology firms like IDG and Sequoia Capital, as well as companies from the electronics industry (such as Lens Technology) and even the hospitality sector (Huazhu), are investing. The focus is not on selling medical equipment but on creating the next interface between humans and machines (similar to how smartphones use touchscreens).
2. Ultrasonic Technology Breakthroughs: Non-invasive BCIs Achieve Precision
Traditional non-invasive BCIs, such as electroencephalogram (EEG) headbands, faced significant limitations—weak signals and high noise levels, which limited their functionality to mere “reading” of brain activity (e.g., measuring attention) rather than “writing” signals (e.g., alleviating anxiety). Huachao’s ultrasonic technology has addressed these issues:
- Penetrating the skull with precision: Ultrasonic waves can pass through the skull and target specific brain regions with an accuracy of 1.5 millimeters, much more precise than common transcranial magnetic stimulation (TMS) methods.
- Closed-loop system: This technology not only reads brain activity but also writes signals to specific areas and then provides feedback on the effectiveness of the stimulation, creating a complete cycle.
- AI assistance: AI now can real-time analyze brain states and adjust stimulation parameters, adapting to individual differences in skull thickness and brain structure.
3. Huachao: More Than Just a BCI Company
Huachao established an AI team shortly after its founding, which is unusual for traditional BCI companies. Li Xin’s approach emphasizes a two-way interaction:
- Mutual enhancement: AI enhances BCI capabilities by modeling brain activity and adjusting stimulation; BCI, in turn, provides insights into brain patterns that can improve AI models.
- Hardware as a starting point: In the short term, Huachao focuses on developing BCI agents that first assess users’ mental states, then use devices for stimulation and track outcomes. Long-term, they aim to transform into a full-fledged AI company.
- Cutting-edge research: They have assembled a team of young researchers (including a student from the UK’s G5 universities) working on ambitious projects like “distilling human consciousness” and “whole-brain simulation.”
4. Prioritizing Survival: Building a Solid Medical Foundation
Li Xin learned from past entrepreneurial failures, where they focused on creating trendy products before finding a market, leading to cash flow issues. Huachao’s business strategy is more pragmatic:
- Three-step approach: First, sell equipment to research institutions to validate the technology (4-5 devices have already been deployed). Second, develop advanced medical applications (e.g., treating depression with clinical evidence). Third, launch consumer products (e.g., anxiety-relieving headbands).
- Risk management: They secure sufficient funding but avoid reckless expansion, focusing on clear goals (e.g., clinical validation) and avoiding overly broad initiatives (e.g., collaborating on general AI capabilities while concentrating on BCI core technologies).
5. Future Competition: Rivals May Be AI Giants
Huachao’s main competitors could be:
- AI platforms: Companies that integrate neuroscience knowledge and BCI data into their AI models.
- Wearable technology leaders: Firms like Apple, which might incorporate BCI functions into glasses or watches to control user interactions and access data.
- Competitive advantages: Huachao’s strength lies in a comprehensive set of technologies—ultrasonic precision, proprietary components (probes, algorithms, systems), and AI capabilities—that are difficult to replicate in the short term.
As for the future, such as digital immortality (using BCIs to read deep brain information and combine it with AI simulations), Li Xin estimates it will take at least ten years and overcome ethical challenges. However, this remains one of their long-term ambitions.
6. Imagination: The Key Weakness of Chinese Teams
Chinese teams excel in solving concrete problems efficiently, but cutting-edge fields require the ability to envision seemingly unreasonable future possibilities and then develop the necessary technologies. For example, the “X” in Huachao’s name, “X-Sonics,” symbolizes the unknown and the infinite—the power of cross-disciplinary imagination. This is a core competitive advantage for both this company and the entire BCI industry.
The brain diagram drawn by an aviation engineer on the wall, reflecting the complexity of the brain, serves as a visual representation of this innovative spirit.
(The text has been translated to plain language to make it accessible to readers without financial or technical backgrounds.)