On March 13, 2026, China's National Medical Products Administration (NMPA) granted commercial registration approval to the NEO system – a motor-restoration brain-computer interface (BCI) developed by Shanghai-based Neuracle – claiming the world's first commercially approved invasive BCI for individuals with spinal cord injury (SCI). 

The headlines that followed spun up a story where China pulls ahead and the U.S. falls behind, implying there’s a new leading player entering the field of BCI. 

In reality, the situation is more nuanced.

In this article:

• What did China actually approve?
• Does China really have the “world’s first” commercially viable BCI?
• Where U.S. BCI companies stand along the path to commercialization
• The real lessons we can learn from China’s BCI landscape
• What this means for the broader field of BCI

NEO is a titanium, coin-sized brain-computer interface that is placed on the brain epidurally – under the skull and above the dura mater, a thin membrane that covers the brain. With eight electrode contacts, it captures signals from the motor cortex, digitizing and transmitting them wirelessly through the skin. The device is used to drive a pressurized-air-powered rehabilitation glove (called a pneumatic glove) that restores grasping functionality.

NEO is currently approved for adults spanning ages 18 to 60 with C2-C6 cervical spinal cord injuries who retain some upper arm functionality but cannot fully grasp. The clinical trial supporting the approval included 36 implant procedures (4 feasibility cases, 32 multicenter confirmatory cases) with 18 months of follow up. All patients achieved home-based, brain-controlled grasp assist, and the trial reported no serious adverse events related to the device. 

Neuracle is also currently recruiting for a prospective clinical trial evaluating the safety and efficacy of its system in patients with motor disability.

Understanding the answer to this requires drawing an important distinction between BCIs and other types of brain implants. A brain-computer interface, in the strictest sense, is a device that decodes neural signals from the brain and translates them into outputs, such as controlling a computer cursor or synthesizing speech.

Neuromodulation devices like the NeuroPace RNS System – a fully implanted, closed-loop, brain-responsive neurostimulator with intracranial leads that detects and responds to abnormal brain activity in real time – and deep brain stimulators (DBS) can also record neural signals, but they work in service of a different goal: modulating neural activity to treat conditions like epilepsy and movement disorders. Both devices have been FDA-approved and Medicare-covered since the late 1990s. 

These are commercially mature, sophisticated devices – and they fall into the category of neuromodulation rather than BCI. The distinction lies not in whether they record, but in what that recording is for: closed-loop therapy rather than decoding intent to control an external device. 

The NEO system, as a high-density ECoG array supporting up to 256 channels, does in fact exceed the capabilities of an RNS or DBS device when it comes to channel count and signal fidelity. However, even high-density ECoG systems lack the data bandwidth and resolution of intracortical systems.

NEO is more sophisticated than legacy neuromodulation devices, but it is not in the same category as the intracortical systems being developed by Neuralink, Paradromics, and others that record at the level of individual neurons. 

The gap becomes clear when you consider what NEO can actually do: support grasping and basic finger movement. Full robotic limb control – the kind of next-gen capability that would provide individuals with SCI a significantly expanded range of motion – demands higher data rates and more refined signal decoding than a non-intracortical system can deliver.

NEO’s approval is a significant signal from a regulatory and commercial perspective of using BCI to restore function for individuals with spinal cord injury, but the underlying technology would be hard to position as “leading internationally” in the way that some headlines have implied. 

While a noteworthy achievement, being first to achieve approval does not mean China leads in technical capabilities.

Additionally, regulatory authorization alone does not equate to a commercially accessible device. The total cost of the procedure is estimated to be ¥300,000 to 500,000 (~$41,400 to $69,000 USD). This device cost is not yet reimbursable by government healthcare. The government-set procedure service fee is set at $900 – significantly less than the total device cost. The first surgery performed under China’s government-guided pricing framework at Wuhan Tongji Hospital in December 2025 was funded solely by research grants.

This shows that while China has granted regulatory approval, they have not yet elaborated a commercially viable path for connecting broader patient populations to their devices.

U.S.-based BCI companies remain leaders when it comes technical capabilities, clinical demonstrations, and venture investment:

• BrainGate Research Program: Unlike the industry-led clinical trials detailed below, BrainGate operates as a research consortium (MGH/Harvard, Brown University, Stanford, UC Davis, Providence VA, and Emory) that has operated under an FDA Investigative Device Exemption (IDE) since 2009 with a publication record spanning 20+ years of intracortical BCI research. BrainGate claims the first wireless intracortical BCI transmission from a human brain (Simeral et al., 2021) and a 2025 Nature publication demonstrating real-time, instantaneous voice synthesis from 256 implanted microelectrodes in an ALS patient (Wairagkar et al., 2025). The latter was described as the first brain-to-voice neuroprosthesis with closed-loop audio feedback. BrainGate2 is actively enrolling across multiple sites.  
• Precision Neuroscience: Received FDA 510 (k) clearance in April 2025 for its Layer 7 Cortical Interface (1,024 electrodes, high density electrocorticography [ECoG] array, tested in 37 patients).
• Synchron: Closed $200m series D in November 2025 with its Stentrode device (16 electrodes, endovascular insertion), completed a 6-patient, 12-month early feasibility study. Recently launched the INTENT early feasibility study to evaluate the long-term value and feasibility of the Stentrode.
• Neuralink: Has currently implanted approximately 20 patients within the PRIME study, (cursor/keyboard control for tetraplegia and ALS), with two additional trials underway: CONVOY (robotic arm control, cross-enrolled from PRIME) and VOICE (FDA Breakthrough Device designated speech restoration trial). Despite this momentum, the pivotal trial design remains unfinalized and PMA is not expected before 2027.
• Paradromics: Received FDA IDE approval in November 2025 for its Connect-One Early Feasibility Study of the Connexus BCI – a high-data-rate intracortical recording system targeting speech restoration – with clinical trial recruitment kicking off in February 2026.

These leading BCI companies do not yet have premarket approval for chronic implantation, nor do they have clear existing codes for reimbursement. However, the technical sophistications across higher electrode counts, broader target indications, and more rigorous clinical trial programs represent a significant lead over China’s NEO, which is epidural rather than intracortical and approved for a relatively small patient population. 

Is China leading now in BCI? For a pure technology standpoint, no. However, it is arguably more progressive in its regulatory and administrative coordination – and that is the real strategic advantage.

Now, let’s dive into what China got right and what U.S. investors and policymakers should pay close attention to.

Building reimbursement infrastructure prior to approval

One year prior to NEO’s approval — before any commercial product existed – China’s National Healthcare Security Administration (NHSA) issued national pricing guidelines that proactively created three distinct BCI-specific billing categories. Soon afterward, multiple provinces implemented the framework, and within 48 hours of the NMPA’s March 2026 approval, the NHSA assigned NEO a medical insurance consumable classification code. This is a prerequisite for insurance billing that industry observers referred to as “light-speed coding.”

NEO’s approval is indicative of a much broader BCI ecosystem. China’s central government formally designated BCIs as a national strategic priority in July 2025, following this with a national roadmap targeting technical milestones by 2027 and a full domestic supply chain by 2030, backed by an ¥11.6 billion ($165M) brain science fund. 

Understanding why this matters becomes clearer when you take a step back to consider how China’s central government operates. These Five-Year Plans function as strategic roadmaps that bind and coordinate action across disparate government sectors in order to align venture capitalists, research universities, state-owned enterprises, regulatory agencies, and leading technology companies around commonly shared goals.

Once BCI became a designated national priority, the full power of China’s centralized coordination moved with it: regulatory agencies could move more quickly, venture capital accelerated, and leading technology entities were directed to provide technical support and financial expertise to emerging BCI companies.

Additionally, their government focuses on investing in basic science across neuroscience, semiconductor research, materials science, and biology – many of the main fields that BCI discoveries depend upon.

This kind of top-down, long-horizon coordination is exactly why China is poised to advance, and why NEO is better understood as a symptom of a well-functioning system rather than a standalone achievement from one single entity.

In addition, as of mid 2025, more than 50 BCI trials have been completed in China, with the organizations behind them now speeding toward various stages of commercialization. Whereas the U.S. has one approved BCI product, China has a national industrial strategy, a diverse pipeline of competitors spanning far beyond just NEO, and reimbursement infrastructure already taking shape around them.

Competition among Chinese BCI companies is intense and deliberate; as central coordination channels competition, companies will race to differentiate themselves knowing that government support will soon follow so long as they demonstrate their progress.

Where the U.S. falls short

On the other hand, in the United States, FDA approval triggers the start of the coverage determination process. The Center for Medicare & Medicaid Services (CMS) then conducts its own assessment, which takes approximately 5 years if the device is novel and the coverage is national. Of 64 novel technologies authorized by the U.S. between 2016 and 2019, less than half (44%) achieved any Medicare coverage at all. (Sexton et. al, 2023) 

The industry refers to this the “reimbursement valley of death,” as devices are legally authorized but functionally inaccessible. It’s not that China eliminated this problem entirely, as NEO is still uninsured and not reimbursable, but they’ve laid effective groundwork in designing their infrastructure to close this gap more quickly.

Additionally, China has developed the capability to accumulate real-world outcome data on a commercial level well before any U.S. company has the opportunity to. If NEO succeeds, their dataset could be strategically utilized to inform next-gen device design and endpoint definitions on a global scale. 

China’s approach is worth emulating. The U.S. is beginning to respond, but it’s moving more slowly. 

In April 2026, CMS and FDA jointly announced the RAPID (Regulatory Alignment for Predictable and Immediate Device) coverage pathway, designed to synchronize FDA market authorization with Medicare national coverage determinations for Class II and Class III Breakthrough Devices. 

Under RAPID, CMS would issue a proposed coverage determination the same day a qualifying device receives FDA authorization, potentially enabling Medicare coverage within two months of approval rather than a year or more. 

‍H.R. 5343 – an act that automatically provides FDA Breakthrough-designated devices with Medicare coverage spanning four years, necessitating that CMS assigns payment codes within three months of FDA approval – would take this even further, although it has not yet been signed into law.

Both reflect a similar pattern that follows China’s strategy of building reimbursement infrastructure in parallel with regulatory review rather than after it. While these are no small steps forward, we have a lot of mileage to make up for. Consider that China designated BCI as a priority in July 2025 – and before a single device ever existed, China already had pricing infrastructure in place. 

The U.S. might have the technical foundation to lead, but this will only hold true if its policy decisions can match the pace of its science.

The key takeaway is that U.S. policymakers should take urgency in reworking our domestic infrastructure to ensure American innovations actually reach the patient populations they're designed to serve. 

If the concern is that China is pulling ahead, the answer is straightforward: make it faster and more economically viable to get BCIs approved and paid for in the United States.

Competition can be a good thing. China’s recent approval and whole-of-government approach to streamlining BCI should serve as an example for US policy makers and industry stakeholders. 

Initiatives like the Implantable Brain-Computer Interface Collaborative Community (iBCI-CC) – bringing together diverse stakeholders across development, safety and efficacy evaluation, and access to implantable BCIs – are the kind of structural, interconnected responses we need to be creating.

However, the U.S. and China are not the only stakeholders in this space. The rest of the world is watching closely, as they will ultimately adopt the frameworks, standards, and BCI technologies that prove to be the most accessible, rigorous, and effective.

Truly becoming the “world’s first leader” in BCI will be determined by whoever builds the most comprehensive ecosystem by bridging scientific rigor, clinical evidence, regulatory pathways, and reimbursement infrastructure to move them all forward together.

The US might currently hold a lead in technological innovation over China in BCI in some cases – but if it is willing to be equally as innovative in its administrative and policy decisions, it could not only continue to lead the world, but lead better.