Elon Musk's infrastructure firm, the Boring Company, will compete to build a new transport link in Chicago.
Mayor Rahm Emanuel is exploring options for a high-speed link between O'Hare Airport and the city centre, and is considering an underground link.
Mr Musk tweeted that the Boring Company would submit a proposal for a "high-speed loop" in Chicago.
He added that the plan would involve "electric pods" travelling in underground tunnels.
Mr Musk has previously outlined his vision for a tunnel network under Los Angeles, in which cars would park on a high-speed sledge and be whisked along underground tracks.
Elaborating on his idea for Chicago, he said: "Electric pods for sure. Rails maybe, maybe not."
The Boring Company has been constructing test tunnels on the premises of SpaceX, another of Mr Musk's businesses, in California.
Chicago's government hopes a transport link can be built at no cost to taxpayers, and says the successful bidder could earn a lot of money from operating the service.
"Mr Musk is a visionary business leader and what he is doing has the potential to change society in many ways," said Prof David Bailey, from Aston Business School.
"He's trying to do lots of different things, so whether they all pay off remains to be seen.
"Some of the things he is trying to achieve are so technologically advanced, you wonder whether they will really happen at all."