xAI Acquires Hotshot to Boost AI Video Capabilities

Elon Musk’s AI company, xAI, has acquired Hotshot, a San Francisco-based startup specialising in AI-powered video generation tools.

The announcement was made by Hotshot CEO and co-founder Aakash Sastry in a post on X on Monday.

Some news – We’re excited to announce that @HotshotSupport has been acquired by @xAI

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

— Aakash (@aakashsastry) March 17, 2025

Revolutionising AI Video Tools

Over the past two years, Hotshot developed three video foundation models—Hotshot-XL, Hotshot Act One, and Hotshot—focusing on advancements in education, entertainment, communication, and productivity.

Sastry expressed enthusiasm for scaling these models further with xAI, leveraging the capabilities of the world’s largest computing cluster, Colossus.

A Journey of Innovation

Founded by Sastry and John Mullan, Hotshot initially worked on AI-powered photo editing tools before transitioning to text-to-video AI models.

The startup attracted investments from prominent venture capitalists, including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel, though funding details were never publicly disclosed.

Strategic Expansion for xAI

The acquisition signals xAI’s intent to develop its own video generation models, potentially competing with OpenAI’s Sora and Google’s Veo 2.

Elon Musk has previously hinted at plans to integrate video-generating models into the Grok chatbot platform, with a “Grok Video” model expected in the coming months.

Transition for Hotshot Users

Hotshot announced it would stop new video creation services as of March 14, giving existing customers until March 30 to download their projects. Details regarding the transition of Hotshot’s team to xAI remain unclear.

This acquisition highlights xAI’s drive to expand its capabilities and shape the future of AI-powered video technologies.