June 2 (Reuters) - Elon Musk's Neuralink said on Monday

that it had raised $650 million in its latest funding round as

its brain implant device enters clinical trials.

"This funding helps us bring our technology to more people -

restoring independence for those with unmet medical needs and

pushing the boundaries of what's possible with brain

interfaces," Neuralink said.

It has started clinical trials for the device, which has

a chip that processes neural signals that can be transmitted to

computers or phones, in three countries.

According to the company, five patients with severe

paralysis are using Neuralink to control digital and physical

devices with their thoughts.

Neuralink received the U.S. Food and Drug

Administration's "breakthrough" tag for its speech restoration

device last month. It had received the same tag for its

vision-restoring device last year.

The health regulator's breakthrough devices program is

intended to provide patients and health care providers with

timely access to medical devices by speeding up development,

assessment and review, according to its website.

Musk said last Wednesday that he was leaving his role as

special adviser to U.S. President Donald Trump to return his

focus to his companies, including Tesla, SpaceX, xAI,

Neuralink and social media platform X.

According to media reports on Monday, Morgan Stanley ( MS )

is shopping for a $5 billion debt package for xAI, with

the artificial-intelligence company seeking a valuation of $113

billion in a share sale worth $300 million.

Neuralink closed its funding round with participation

from key investors including ARK Invest, DFJ Growth, Founders

Fund, G42, Human Capital, Lightspeed, QIA, Sequoia Capital,

Thrive Capital, Valor Equity Partners and Vy Capital, the

company said.

Semafor reported last month that the startup

had raised

$600 million in a deal valuing it at $9 billion before the

new cash.