Elon Musk’s artificial intelligence company, xAI, has made a significant move by acquiring Hotshot, a startup specializing in AI-powered video generation tools similar to OpenAI’s Sora. The announcement was made by Aakash Sastry, the CEO and co-founder of Hotshot, in a post on X (formerly Twitter) on Monday. In his post, Sastry shared insights into Hotshot’s journey over the past two years, stating, “Over the past 2 years we’ve built 3 video foundation models as a small team — Hotshot-XL, Hotshot Act One, and Hotshot.”
Some news – We're excited to announce that @HotshotSupport has been acquired by @xAI
— Aakash (@aakashsastry) March 17, 2025
Over the past 2 years we've built 3 video foundation models as a small team – Hotshot-XL, Hotshot Act One, and Hotshot.
Training these models has given us a look into how global education,… pic.twitter.com/W4rmYUxnMR
He emphasized that the experience gained from training these models has provided valuable insights into the transformative potential of AI in global education, entertainment, communication, and productivity in the coming years. Sastry expressed enthusiasm about continuing to scale these efforts on xAI’s massive computing infrastructure, known as Colossus, stating, “We’re excited to continue scaling these efforts on the largest cluster in the world, Colossus, as a part of xAI!”
Hotshot, which is headquartered in San Francisco, was co-founded by Sastry and John Mullan several years ago. Initially, the startup focused on creating AI-driven photo creation and editing tools. However, it later pivoted towards developing text-to-video AI models, recognizing the growing demand for such technology. Before its acquisition, Hotshot successfully attracted investments from notable venture capitalists, including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel, although the company did not publicly disclose the specifics of its funding rounds.
The acquisition of Hotshot by xAI suggests that the company is positioning itself to develop its own video generation models, aiming to compete with established players like OpenAI’s Sora and Google’s Veo 2. Musk has previously hinted at xAI’s plans to create video-generating models to enhance its Grok chatbot platform. During a livestream event in January, he mentioned that he anticipates the release of a “Grok Video” model within a few months.
In light of the acquisition, Hotshot announced on its website that it began phasing out new video creation features on March 14. The company has informed existing customers that they will have until March 30 to download any videos they have created using the platform. As of now, it remains unclear whether the entire Hotshot team will be integrated into xAI following the acquisition.
