The startup will be led by Musk, the CEO of Tesla TSLA.O and owner of Twitter, who has said on several occasions that the development of AI should be paused and that the sector needs regulation.
"Announcing formation of @xAI to understand reality," Musk said in a tweet on Wednesday.
The website said xAI will hold a Twitter Spaces event on July 14.
Musk in March registered a firm named X.AI Corp, incorporated in Nevada, according to a state filing.
The firm lists Musk as the sole director and Jared Birchall, the managing director of Musk's family office, as a secretary.
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