Microsoft co-founder Paul Allen is planning to build a spaceship that could replace NASA's Space Shuttle program this decade.
Allen, 58, is hoping his new company, Stratolaunch Systems, will launch unmanned rockets from a flying carrier plane to ferry government and commercial payloads into space and back.
It would eventually evolve to human space missions.
The initiative comes only months after the United States retired the Space Shuttle program after 30 years, opening the door to private enterprise to supply space vehicles.
Allen's rocket will be launched from a massive carrier aircraft powered by six jumbo jet engines, to be constructed by Scaled Composites, a unit of defense contractor Northrop Grumman. The rocket itself will be made by private space company SpaceX, founded by Elon Musk, the billionaire co-founder of PayPal.
The first test flight is targeted within five years.
"I have long dreamed about taking the next big step in private space flight," Allen said.
Allen - listed by Forbes magazine as the world's 57th richest person, with a fortune of $13.2 billion - is the latest in a line of tech billionaires with interests in the privatisation of space travel.
His space ambitions put him alongside Musk and Amazon.com founder Jeff Bezos, whose Blue Origin aims to put people into space at an affordable price, rather than the millions of dollars it has cost up to now. Richard Branson's Virgin Galactic is also looking to transport passengers into sub-orbital space.
Allen, who made up the name Microsoft, left the company in 1983 as he dealt with a first battle with cancer. He recently survived a second course of treatment for a different type of cancer, but says he is healthy now.
(Reporting by Bill Rigby. Editing by Gunna Dickson)