Elon Musk’s artificial intelligence company, xAI, has acquired Hotshot, a San Francisco-based startup specializing in AI-powered video generation. The move signals xAI’s ambition to compete in the rapidly evolving AI-driven video space against major players like OpenAI’s Sora and Google’s Veo 2.
Hotshot’s CEO and co-founder, Aakash Sastry, announced the acquisition in a post on X, highlighting the company’s progress in building advanced video foundation models.
“Over the past two years, we’ve developed three video foundation models—Hotshot-XL, Hotshot Act One, and Hotshot—as a small team,” Sastry wrote. “Training these models has given us insight into how global education, entertainment, communication, and productivity are set to transform in the coming years. We’re excited to continue scaling these efforts on the world’s largest AI cluster, Colossus, as part of xAI!”
Founded by Sastry and John Mullan, Hotshot initially focused on AI-powered photo editing before pivoting to text-to-video technology. The company secured investments from notable venture capital firms and individuals, including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel. However, the financial details of Hotshot’s funding rounds remain undisclosed.
xAI’s acquisition suggests a strategic move to enhance its AI video capabilities, potentially integrating them into its Grok chatbot platform. Musk previously hinted at xAI’s video generation aspirations, revealing in a January livestream that a “Grok Video” model could debut in the near future.
Following the acquisition, Hotshot has begun shutting down its video creation services. According to a statement on its website, new video creation ceased on March 14, and existing users have until March 30 to download their content.
