Elon Musk’s AI company, xAI, has acquired Hotshot, a San Francisco-based startup specializing in AI-powered video generation. The announcement came from Hotshot’s CEO, Aakash Sastry, who shared the news on X. He highlighted that the company had developed three AI video foundation models—Hotshot-XL, Hotshot Act One, and Hotshot—over the past two years. The acquisition will allow Hotshot’s technology to scale further using xAI’s massive computing infrastructure, Colossus.
Hotshot initially focused on AI-powered photo editing before shifting to text-to-video AI models. The startup had secured investments from venture capitalists, including Reddit co-founder Alexis Ohanian and SV Angel, but never disclosed the size of its funding rounds. While financial details of the acquisition remain undisclosed, the move signals xAI’s ambitions to enter the AI-generated video space, competing with OpenAI’s Sora, Google’s Veo 2, and other leading models.
Musk has previously hinted at xAI’s plans to develop video-generation models, mentioning in a January livestream that a “Grok Video” model could be released in the coming months. The acquisition of Hotshot aligns with this vision, suggesting that xAI is preparing to integrate advanced video AI into its Grok chatbot platform.
Following the acquisition, Hotshot announced it would be shutting down new video creation services as of March 14, allowing existing users to download their content until March 30. However, it remains unclear whether the entire Hotshot team will join xAI, as Sastry declined to comment.
With the growing demand for AI-generated video, xAI’s latest move positions it as a direct competitor in the space, leveraging Hotshot’s expertise to accelerate development. As AI-powered video tools continue to reshape industries like entertainment, education, and communication, xAI’s entry into this field could further intensify competition among top AI companies.
