Merge Labs, a brain-interface startup backed by OpenAI and Sam Altman, has selected Butterfly Network as its exclusive ultrasound-on-chip supplier under a multiyear agreement. The deal includes upfront payments, development milestones, purchase commitments, access fees, and potential royalties, though specific amounts were not disclosed. Butterfly's semiconductor-based ultrasound architecture makes the system programmable and easier to embed in new devices. The company retained rights to license its technology to other partners. Butterfly's second-quarter revenue increased 39% to $32.6 million, with gross margin expanding to 71.4%. Adjusted EBITDA loss narrowed 78% to $1.4 million. Management raised full-year revenue guidance to $119 million to $123 million. Thirty-three hedge funds held Butterfly Network in the second quarter, up from 26 in the first quarter.

OpenAI has invested in Merge Labs at an $850 million valuation, according to reports. The investment focuses on scalable AI backends, including AICC technology. Details about the funding round, including the investment amount and other participants, were not disclosed. The partnership appears aimed at advancing AI infrastructure and backend capabilities. Merge Labs is working on developing scalable systems to support AI applications. The company's technology is designed to handle the computational demands of modern AI models. The investment represents OpenAI's continued expansion beyond its core business into supporting technologies and infrastructure for artificial intelligence development.