Elon Musk’s Neuralink, xAI Speed Up Fundraising Plans After Tesla CEO’s DOGE Exit

Elon Musk's brain implant company Neuralink announced Monday a $650 million capital raise in a new funding round, while his artificial intelligence (AI) venture xAI has reportedly opted for a debt offering.

The development came shortly after the Tesla CEO confirmed his exit from the Department of Government Efficiency (DOGE), which took up much of the billionaire’s time. 

Investors, including Sequoia Capital, Thrive Capital, Peter Thiel’s Founders Fund, Lightspeed Venture Partners and Cathie Wood’s Ark Investment Management participated in Neuralink’s Series E funding round.

Neuralink said that since its Series D financing in August 2023, its brain implant has been used by five individuals with severe paralysis, and global clinical trials have been launched for neurosurgical care spanning three countries and two continents.

The Series D financing raised $280 million from investors such as Founders Fund. 

The Musk-backed company has also launched a trial, dubbed CONVOY, to test out new use cases beyond digital device control. Additionally, it has invested heavily in expanding the number of neurons and brain regions that our device interfaces with to unlock new dimensions of human potential.

Neuralink’s brain-computer interface (BCI) product, the N1 implant, is designed to record neural activity through 1,024 electrodes distributed across 64 flexible leads, or “threads.” Each of these threads are thinner than a human hair and can be placed independently in the brain.

The company said the five individuals with severe paralysis who use Neuralink can now control digital and physical devices with their thoughts, marking a profound step toward helping restore independence.

BCI research is gaining momentum, with Neuralink’s rival and startup, Paradromics, testing its device, Connexus, in its first human patients in May. 

Last month, Synchron, a New York-based medical equipment manufacturer, announced teaming up with Apple (APPL), allowing the latter to add a new protocol to support "Switch Control" for BCI in its hardware devices.

Separately, a Bloomberg report citing people familiar with the matter said Musk-owned xAI has roped in Morgan Stanley to raise $5 billion in debt. The interest rate for the debt will be in double digits.

The fund will likely help the startup build xAI’s ambitious Memphis data center.

The debt offering has already generated demand for over $3.5 billion.

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