Sam Altman is in the process of co-founding a new brain-to-computer interface startup called Merge Labs and raising funds for it with the capital possibly coming largely from OpenAI’s ventures team, unnamed sources told the Financial Times. 

The startup is expected to be valued at $850 million. A source familiar with the deal tells TechCrunch that talks are still early and OpenAI has not yet committed to participation, so terms could change.

Merge Labs is also reportedly working with Alex Blania, who runs Tools for Humanity (formerly World) — Altman’s eye-scanning digital ID project that “allows anyone to verify their humanness,” as the company describes.

Merge Labs will compete with Elon Musk’s Neuralink, which is developing computer interface chips designed to be implanted in the brain. Musk founded Neuralink in 2016 (although its existence wasn’t known until 2017) and the company has made serious progress.

Neuralink is currently in trials with people who suffer from severe paralysis. It aims to allow them to control devices with their thoughts. It raised a $600 million Series E at a $9 billion valuation in June.

Neuralink (and perhaps, Merge Labs) could revolutionize how humans interact with technology. Some might even say their tech could take humanity toward “the singularity.”

Long before Silicon Valley became obsessed with the concept of artificial general intelligence (AGI), it was enamored with “the singularity.” Musk has used the term to describe a time when AI surpasses human intelligence. The more classic definition (after a 1960’s novella of the same name by Dino Buzzati) means the merging of tech with humans.

Altman blogged about “The Merge” in 2017. “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, where Musk was still a co-founder.

Musk left OpenAI in 2018 and the relationship between the two tech leaders has since disintegrated. Just this week, Altman and Musk were bickering on X after Altman accused Musk of manipulating X and Musk called Altman a liar.

We’ll have to wait and see when and if Merge Labs becomes formally announced. But it stands to reason that Altman wasn’t going to let Musk work on something as important as the singularity without a challenger.

OpenAI declined comment.