Value of Elon Musk’s Neuralink Triples With FDA Clearance

Neuralink received the FDA's approval to test its brain chips in humans on May 25, marking a key step in Elon Musk's ambition to merge human consciousness and artificial intelligence.

An illustration of Elon Musk and a Neuralink logo.
Neuralink received the FDA’s approval to test its brain chips in humans on May 25. Jonathan Raa/NurPhoto via Getty Images

Neuralink, the controversial neurotech company founded by Elon Musk, saw its valuation soar after receiving the FDA’s approval last week to test its implantable brain chips in humans.

The startup was recently valued by private investors at $5 billion ahead of the FDA’s human trial clearance, Reuters reported today (June 5), citing five people familiar with the matter. Following the FDA approval, Neuralink shares were marketed on the private market at a $7 billion valuation, or $55 per share, according to an investor email seen by Reuters. It’s unclear whether the offer has found any buyers. The number represented a more than 300 percent jump from Neuralink’s last publicly reported valuation of close to $2 billion in 2021.

The maximum amount sought for the Neuralink shares marketed at a $7 billion valuation was just $500,000, according to Reuters, suggesting most potential buyers are small investors.

Neuralink was founded by Musk in 2016 and is backed by several of his early business partners, including PayPal cofounder Peter Thiel and OpenAI CEO Sam Altman. It also counts Google Ventures and Dubai-based Vy Capital as investors.

Neuralink did not respond to a request to comment on its latest valuation number.

What does Neuralink do?

Neuralink is developing “Link,” a wireless, implantable brain chip the size of a quarter coin that connects a human brain with an outside computer to perform various tasks. The device, known as a brain-computer interface (BCI), has the potential to restore certain physical functions in people with disabilities—such as helping blind people see and paralyzed patients walk again. Other players in the BCI space include Salt Lake City-based Blackrock Neurotech and New York-based Synchron.

The application of BCI in medical settings isn’t new, and Neuralink isn’t the first company cleared by the FDA to test the technology in humans. Neuralink’s innovation lies in how it makes and installs brain chips. Neuralink’s implant is designed to be mass produced and installed by a robotic surgeon. Musk’s ultimate goal is to expand beyond medical use and make the product available for healthy people so as to fully merge human consciousness and artificial intelligence.

Neuralink’s animal tests draw controversy

Neuralink has previously tested its brain implant in pigs and monkeys. In April 2021, the company demonstrated how its Link chip allowed a macaque monkey to play the video game Pong with his mind. At another product demo in November 2022, Musk played a video of a different monkey with a chip in his head “typing” on a virtual keyboard by following highlighted key prompts on a screen.

Neuralink’s handling of animals during these experiments has drawn criticism from doctors and animal rights groups. The U.S. Department of Agriculture is currently investigating the company for potential animal-welfare violations related to those tests.

The FDA initially rejected Neuralink’s application for a human trial last year, citing safety reasons. Last week’s approval marked a key milestone in Neuralink’s path toward commercialization. Musk said during the November 2022 product demo human testing could begin as soon as this year and claimed he might have a chip implanted in his own brain for one of its future demos.

Value of Elon Musk’s Neuralink Triples With FDA Clearance