Internal sources tell The WSJ that the company, called Neuralink, is developing "neural lace" technology that would allow people to communicate directly with machines without going through a physical interface.
Neural lace involves implanting electrodes in the brain so people could upload or download their thoughts to or from a computer, according to the WSJ report. The product could allow humans to achieve higher levels of cognitive function.
Representatives for Tesla and Elon Musk did not immediately return Business Insider's request for comment.
Musk has expressed his interest in 'neural lace' technology before. Musk first described the potential product at Vox Media's Code Conference in 2016, saying it would allow humans to achieve "symbiosis" with machines.
He said the neural lace could prevent people from becoming "house cats" to artificial intelligence.
"I don't love the idea of being a house cat, but what's the solution? I think one of the solutions that seems maybe the best is to add an AI layer," Musk said at the Vox Code Conference.
"A third, digital layer that could work well and symbiotically."
Musk said he was preparing for an announcement regarding his neural lace concept on Twitter in January.
But Neuralink's first products could involve using implants to treat disorders like epilepsy or major depression, The WSJ reports.
According to The WSJ, Musk has taken an "active role" in setting up Neuralink, which was registered as a medical research company in California last July.
Musk has reportedly discussed financing Neuralink primarily himself.
Neuralink is also exploring a possible investment from Founders Fund, a venture capital firm founded by Peter Thiel, according to The WSJ report. Musk co-founded PayPal with Thiel.
This article was originally published by Business Insider.