Elon Musk’s artificial intelligence company, xAI, has made a strategic move by acquiring Hotshot, a San Francisco-based startup specializing in AI video generation technology. The acquisition was confirmed on Monday by Hotshot’s CEO and co-founder, Aakash Sastry, in a post on X.
Sastry shared that over the past two years, Hotshot’s small team developed three video foundation models: Hotshot-XL, Hotshot Act One, and Hotshot. “Training these models has given us a look into how global education, entertainment, communication, and productivity are about to change in the coming years,” Sastry wrote. “We’re excited to continue scaling these efforts on the largest cluster in the world, Colossus, as a part of xAI!”
Hotshot was originally founded by Sastry and John Mullan with a focus on AI-driven photo creation and editing tools. However, the company later pivoted toward text-to-video AI models, a fast-emerging sector in the AI space. Before the acquisition, Hotshot secured investments from prominent backers like Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel. The startup never publicly disclosed the size of its funding rounds.
xAI’s move signals its intention to compete with other leading players in AI Video Generation, such as OpenAI’s Sora and Google’s Veo 2. Musk had previously hinted at integrating video-generating capabilities into xAI’s Grok chatbot platform. During a livestream earlier this year, he teased the upcoming launch of “Grok Video,” a model expected to roll out within months.
As part of the transition, Hotshot announced on its website that it has already begun winding down new video creation features as of March 14. Customers have until March 30 to download their existing videos from the platform. However, it remains unclear whether the entire Hotshot team will join xAI. Sastry declined to comment on staffing changes.
