OpenAI and its CEO, Sam Altman, are planning to invest in brain-implant startup Merge Labs, a potential competitor to Elon Musk’s Neuralink in developing computer–brain interface technology. Merge Labs is expected to be valued at about $850 million, according to TechCrunch. The talks are still in the early stages, and OpenAI has not yet committed to participating, so the terms could change.

Altman will launch the product alongside Alex Blania, who runs World, an eyeball-scanning digital ID project, also backed by the OpenAI CEO. Altman will be a co-founder in the company, however, he will not have a day-to-day role in it, according to The Financial Times.

The startup’s name is a reference to what many in Silicon Valley describe as “the merge,” a moment when humans and machines come together. Altman wrote a blog post about this in 2017, where he speculated this moment could come as early as 2025. “Although the merge has already begun, it’s going to get a lot weirder. We will be the first species ever to design our own descendants,” he postulated at the time, citing research work he saw at OpenAI. This year, he suggested in another blog post that we could soon have “high-bandwidth brain-computer interfaces” as a result of recent technological advances.

Merge Labs aims to raise $250 million from OpenAI and other investors, although the talks are at an early stage. Altman will not personally invest.

The startup is likely to emerge as a rival to Neuralink, founded by Altman’s rival Musk. OpenAI was co-founded by Altman and Musk, but Musk left the board in 2018 after clashing with Altman, and the two have been at odds with each other since then. Musk had launched his own AI startup xAI in 2023, and attempted to block efforts for OpenAI to be converted into a for-profit organization. While Neuralink has been leading the development of the brain-computer interface technology, there are other companies like Precision Neuroscience and Synchron trying to catch up.

Earlier this year, Neuralink raised $650 million at a $9 billion valuation. The company is backed by various investors, including Sequoia Capital, Thrive Capital and Vy Capital. Altman had previously invested in Neuralink.

Neuralink has also reportedly been setting big goals for the future. Internal documents reviewed by Bloomberg revealed the company is aiming to surgically implant its brain chips in 20,000 people every year by 2031. If they hit that target, it could bring at least $1 billion in annual revenue.