Elon Musk is developing plans to launch a new artificial intelligence start-up to compete with ChatGPT-maker OpenAI, as the billionaire seeks to join Silicon Valley’s race to build generative AI systems.

The Tesla and Twitter chief is assembling a team of artificial intelligence researchers and engineers, said people familiar with the tech entrepreneur’s plans.

Musk is also in discussions with a number of investors in SpaceX and Tesla about putting money into his new venture, said a person with direct knowledge of the talks. “A bunch of people are investing in it . . . it’s real and they are excited about it,” the person said.

Musk incorporated a company named X.AI on March 9, according to Nevada business records. He is the company’s only director, its secretary is listed as Jared Birchall, the ex-Morgan Stanley banker who manages Musk’s wealth. Musk recently changed the name of Twitter to X Corp in company filings, as part of his plans to create an “everything app” under the brand “X”.

For the new project, Musk has secured thousands of high-powered GPU processors from Nvidia, said people with knowledge of the move. GPUs are the high-end chips required for his aim to build a large language model — AI systems capable of ingesting enormous amounts of content and producing humanlike writing or realistic imagery, similar to the technology that powers ChatGPT.

The speed with which Musk is moving will raise eyebrows in some corners of the AI community after he led a letter, cosigned by thousands of other tech figures, calling for a pause on development of GPT-style models over safety concerns.

The billionaire’s potential entry to the hot generative AI market will add yet another venture to his diverse portfolio of responsibilities and investments. This includes running Twitter and Tesla, as well as founding SpaceX, his $137bn rocket maker, Neuralink, a neurotechnology researcher, and The Boring Company, a tunnelling start-up.

Musk is recruiting engineers from top AI labs including DeepMind, according to those with knowledge of his plans, who said he began to explore the idea of a rival company earlier this year in response to the rapid progress of OpenAI.

Musk has brought on Igor Babuschkin, a former DeepMind employee, and roughly half a dozen other engineers. The Information previously reported Babuschkin’s early talks with Musk.

The new company would allow Musk to take on OpenAI, the Microsoft-backed group that he co-founded in 2015. He left the board three years later amid clashes with its management, including over attitudes to AI safety, according to two people who were involved in OpenAI at the time. Shortly afterwards, the organisation morphed into a for-profit start-up and raised a $1bn investment from Microsoft.