Proposals were invited last year to design, build and operate an express rail connection to O'Hare, with the idea to cut travel time for the 17 miles from downtown Chicago to the airport to 20 minutes; Musk's solution could see passengers complete the journey in just 12 minutes, hitting a peak speed of 150 mph.
Both The Boring Company and Chicago Mayor Rahm Emanuel's office said that it's too early to estimate a timeline or to outline the project's complete cost, but the Chicago Tribune is reporting the project would cost less than $1 billion to complete. A final deal is also yet to be signed.
Earlier, Musk had described a "high-speed loop" connection between Chicago and O'Hare. According to Musk, the loop would differ from a Hyperloop by not having a vacuum inside the tube, as short routes would not require canceling out air friction.
The loop vehicles, called "skates," would carry 16 passengers each, departing as frequently as every 30 seconds.
Emanuel spoke about the project at a news conference Thursday in an unfinished underground train station in the Loop that will be used by the system.
Emanuel said it will be funded by the company with no taxpayer subsidies, and added that in conjunction with O'Hare's planned $8.5 billion expansion, it will fuel Chicago's economic growth.
"Were there doubters when Chicago said we're going to build the first skyscraper in America? Yes. Where are they today?" Emanuel said.
One Chicago politician did voice doubts.
Alderman Scott Waguespack, whose ward covers parts of the city's north and northwest sides, said there are many unanswered questions and the project should be subject to a public hearing.
"Mayor Emanuel is prioritizing the interests of billionaires and big corporations ahead of the very real and immediate needs of Chicago's taxpayers and neighborhoods," he said in a statement.
Drilling for the project, pending regulatory and environmental approvals, could begin in as soon as three to four months, said Musk, who also founded and heads luxury electric car maker Tesla Inc and rocket maker SpaceX. It could be operational 18 to 24 months after that.
"We're super excited," said Musk, adding he does not expect any problems raising capital for the project. He said the project was certain to cover operational costs, but whether it provided a good return on capital was a separate question.
Boring said the passenger fare will be less than half that of a taxi or ride share, but more than the fare on the current train system, which makes the trip in 30-45 minutes. The system will operate 20 hours a day, seven days a week.
The Boring Co has been promoting its plans for Hyperloop tunnels that would allow high-speed travel between cities, such as travel from New York to Washington in less than 30 minutes, but those systems would operate in a near-vacuum.
Musk unveiled a plan last month in Los Angeles to build tunnels beneath the city for a high-speed network of "personalized mass transit," promising to build it without disturbance or noise at the surface.
Two Los Angeles neighborhood groups have launched a legal challenge to Boring's bid to win fast-track city approval of a 2.7-mile-long tunnel beneath a busy stretch of the city's West Side.
The Chicago and Los Angeles projects come as Musk wrestles with production problems for the rollout of the highly anticipated Tesla Model 3 sedan. Some investors are concerned his leadership roles at Boring and SpaceX have spread him too thin.
Reuters' Suzannah Gonzales and Brendan O'Brien contributed to this report.