• xAI has acquired Hotshot, a San Francisco-based startup specializing in AI-powered video generation.
  • Hotshot ceased new video creation on March 14, with existing users able to download their content until March 30.

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 potential expansion into the generative video AI space, putting it in direct competition with OpenAI’s Sora and Google’s Veo 2.

Hotshot’s CEO and co-founder, Aakash Sastry, confirmed the acquisition in a post on X, highlighting the company’s journey in developing three video foundation models: Hotshot-XL, Hotshot Act One, and Hotshot.

“Over the past 2 years we’ve built 3 video foundation models as a small team — Hotshot-XL, Hotshot Act One, and Hotshot,” Sastry wrote. “Training these models has given us a look into how global education, entertainment, communication, and productivity are about to change in the coming years. We’re excited to continue scaling these efforts on the largest cluster in the world, Colossus, as a part of xAI!”

Hotshot’s Journey and Investor Backing

Founded by Sastry and John Mullan, Hotshot initially focused on AI-powered photo editing before pivoting to video generation.

The startup secured investments from prominent venture capitalists, including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel, though it never disclosed its funding amounts.

As part of the acquisition, Hotshot has begun shutting down its services. The company announced that new video creation ceased on March 14, and existing users have until March 30 to download their content.

xAI’s Vision for AI-Generated Video

The acquisition hints at xAI’s ambitions in the video AI space. Musk has previously suggested that xAI is developing video-generation capabilities, potentially integrating them into its Grok chatbot platform. In a January livestream, he stated that a “Grok Video” model could be released within a few months.

It remains unclear whether Hotshot’s entire team will transition to xAI, as Sastry declined to comment on the matter.

Edited by Harshajit Sarmah