The new company, called X.AI Corp., appears part of Musk's plan to make a rival effort to OpenAI, the company that launched the ChatGPT in November, the report said, citing state filings and researchers familiar with the billionaire's recruiting campaign.
Musk co-founded OpenAI eight years ago but quit after losing a struggle for power.
Last month, Musk joined a group of tech executives and experts in calling for a freeze on AI development until safety standards are established.
Musk did not respond to a request for comment on X.AI, the report added.