FREMONT, California: Elon Musk's brain implant startup Neuralink, valued at some $2 billion during a private fundraising round two years ago, is now valued at $5 billion, based upon privately executed stock trades.
Reuters reported that ahead of a company announcement on 25th May that US regulators had approved a human trial on its brain chip, some purchases by bullish investors boosted Neuralink's valuation in recent months.
However, Kip Ludwig, former program director for neural engineering at the US National Institutes of Health, said he "optimistically" expected Neuralink to take at least 10 more years to commercialize its brain implant.
After the trial is approved, Neuralink shares are expected to be valued at $7 billion, equivalent to $55 per share, Reuters added.
According to Musk, the Neuralink chip will be available for both healthy and disabled people, to treat conditions such as obesity, autism, depression and schizophrenia, and he even thinks implants can be used for web-surfing and telepathy.
Data provider Pitchbook said that In its last fundraising in 2021, Neuralink raised $205 million at an approximately $2 billion valuation.
Many of Neuralink's recent stock sales have been to relatively smaller investors, who aim to buy shares in companies owned by Musk, rather than focus on their valuations, which accounted for a large proportion of recent stock sales.
Sim Desai, chief executive of Hiive, an online platform where the shares are traded, said demand for Neuralink stock has been "tremendous," and predicted that buyers are willing to pay a valuation of around $4.5 billion, according to Reuters.
However, Arun Sridhar, a scientist and entrepreneur who specializes in neuromodulation, stressed that based on how early Neuralink's brain implant is in its clinical development, the company's valuation was "bonkers."
"A study to assess safety and tolerability is in no shape or form valid to justify a $5 billion valuation," Sridhar said, as quoted by Reuters.
Reuters reported that due to safety reasons, the FDA initially rejected Neuralink's request for a human trial last year.
Neuralink has come under scrutiny from US lawmakers, as its animal-research board could have violated conflict-of-interest regulations, while the law enforcement arm of the US Department of Agriculture has been investigating Neuralink for potential animal-welfare violations.
Also, the Department of Transportation is separately investigating Neuralink for alleged illegally transporting dangerous pathogens on chips removed from monkey brains without proper containment measures.