Elon Musk’s Neuralink just got FDA approval for human trials. Now what?

Exploring the Business and Ethical Implications of Brain-Computing Interface (BCI) Innovation

You may have seen this news a few weeks ago. Founded by Elon Musk in 2016, Neuralink entered the industry with a brain-computer interface (BCI) called the Link — an electrode-studded chip sewn into the surface of the brain to connects it to external computing— as well as a robotic device that implants the chip.

They’ve emerged as a significant player in the neurotechnology field. Following the company’s public debut in 2019, it made substantial strides in its research, including successful pig and monkey trials in 2020 and 2021, respectively. Their first application for FDA approval was rejected in 2022 citing human safety concerns and scrutiny over animal treatment and regulatory hurdles.

So, what does Neuralink’s achievement of this crucial milestone mean?

1. Regulatory Hurdles and Ethical Concerns

While the FDA approval for human trials is a step forward for Neuralink, Kip Ludwig, former program director for neural engineering at the U.S. National Institutes of Health, “optimistically” expects Neuralink to take at least 10 more years to commercialize its brain implant. Competitors like Synchron have been working on brain computer interfaces for years. Furthermore, Neuralink is currently under investigation by the U.S. Department of Agriculture for potential animal-welfare violations, highlighting the stringent oversight and potential obstacles that accompany the development of such revolutionary technologies.

Neuralink’s innovative endeavors are not without controversy. The initial FDA rejection of Neuralink’s human trial application cited safety reasons, which involved potential issues with the product’s lithium battery and the risk of damage to brain tissue. The company has also been subject to criticism over its treatment of animal subjects during testing, with alleged ‘needless suffering and deaths’ among pigs, sheep, and monkeys leading to a federal investigation.

The scrutiny Neuralink is facing underscores the complex nature of blending technology and biology, and the need for more comprehensive and stringent regulation in the field of neurotechnology. The lack of concrete plans for data safety, especially in the context of storing and processing sensitive brain data, further accentuates this regulatory need.

2. Implications for Healthcare Commercialization

According to Musk, Neuralink’s brain implant technology aims to help treat a variety of conditions including obesity, autism, depression, and schizophrenia, with more modest short-term objectives of aiding paralyzed patients to communicate without typing. However, Physicians Committee for Responsible Medicine expressed concerns, urging Neuralink to shift to noninvasive brain-computer interfaces to avoid surgical complications and potential infections.

The envisioned applications range from treating mental health conditions to assisting individuals with neurodegenerative disorders. Globally, over 264 million people suffer from depression, and approximately 3.5 million people in the U.S. live with an autism spectrum disorder. If successfully developed and commercialized, Neuralink’s brain chip could significantly impact these populations and the associated markets, which are projected to reach $18.3 billion for depression treatment and $4.5 billion for autism services in the U.S. alone by 2026.

3. Business Valuations and Expert Skepticism

Neuralink, recently saw its valuation rise dramatically from $2 billion to approximately $5 billion based on privately executed stock trades, on the heels of FDA approval. As Sim Desai, Chief Executive of Hiive, an online platform where the shares are traded, noted, demand for Neuralink stock has been “tremendous,” demonstrating the potential investor interest in this sector.

Neuralink’s secondary trades have driven its valuation increase, deviating from the trend where pre-IPO companies are valued at an average discount of 47% to their last funding round, according to data provider Caplight. Despite investor interest, some experts remain skeptical about Neuralink’s value. For instance, Arun Sridhar, a scientist and entrepreneur specializing in neuromodulation, deemed Neuralink’s valuation “bonkers” given the early stage of its clinical development: “A study to assess safety and tolerability is in no shape or form valid to justify a $5 billion valuation”

4. Big Picture Questions and Considerations

The FDA’s approval of Neuralink’s human trials brings us closer to a future where humans interface directly with machines, a proposition that raises profound questions around ethics, societal implications, and the future of human cognition. As we edge closer to a potential era of human-cyborg hybrids, the role of companies like Neuralink and their profit-driven pursuits in shaping this future warrants close scrutiny and robust regulatory oversight.

Neuralink’s long-term goal, as stated by Musk, is not limited to medical applications, but extends to enhancing human capabilities and helping humans coexist with advancing AI.

The issues surrounding animal testing and treatment also raise questions about the ethical responsibilities of tech firms venturing into biomedical research. In a field traditionally dominated by rigorous scientific protocols and ethical guidelines, the rapid advancement and “Silicon Valley” style approach may lead to potential lapses in established practices.

“The brain is not just another organ…Mental privacy is the sanctuary of our minds, and should be protected at the global level.” — Rafael Yuste, Columbia University Neurobiologist

Despite the controversy, the promise of such technology is undoubtedly interesting. Dystopia has become so commonplace that it’s easy to overlook the downsides of opening up this pandora’s box. In our quest to unlock human potential, we should not inadvertently create a world where the ability to access such enhancements leads to new forms of inequality, or even a world where such enhancements become a requirement rather than a choice.

Interested in the future of brain-computing interfaces (BCI) and the neurotechnology industry? Sign up for our forthcoming market research report.