Elon Musk’s artificial intelligence company, xAI, has made a strategic move by acquiring Hotshot, a startup specialising in AI-powered video generation tools.
Hotshot’s CEO and co-founder, Aakash Sastry, made the announcement in a post on X on Monday.
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How the acquisition will change Hotshot
Hotshot, initially focused on AI-powered photo editing, later pivoted to developing text-to-video AI models. The company has trained three video foundation models: Hotshot-XL, Hotshot Act One, and Hotshot.
These models have been developed over the past two years and have attracted investments from prominent venture capitalists, including Reddit co-founder Alexis Ohanian and Lachy Groom.
“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, 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!” Aakash Sastry shared on X.
As part of the acquisition, Hotshot announces on its website the discontinue new video creation services starting March 14, 2025. Existing users can download their previously created content until March 30, 2025.
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xAI’s strategic expansion and competition
The acquisition of Hotshot is a strategic move by xAI to enhance its capabilities in AI video generation, potentially competing with platforms like OpenAI’s Sora and Google’s Veo 2.
Elon Musk has hinted at integrating video-generating models into xAI’s Grok chatbot platform, with plans for a “Grok Video” model in the coming months.
xAI wants to use Hotshot’s technology to improve its AI offerings. Adding Hotshot’s models will help xAI compete in the fast-changing AI video generation market.