Elon Musk’s AI company, xAI, has acquired Hotshot, a startup specializing in AI-driven video generation tools, similar to OpenAI’s Sora. Hotshot CEO Aakash Sastry announced this acquisition on X, highlighting the development of three video foundation models over the past two years—Hotshot-XL, Hotshot Act One, and Hotshot. The San Francisco-based startup initially focused on AI photo tools before transitioning to text-to-video models. The acquisition suggests that xAI plans to enhance its own video generation capabilities to compete in the market. Hotshot is discontinuing new video creation, allowing existing customers to download their videos by March 30.
xAI, the AI venture founded by Elon Musk, has acquired Hotshot, a startup developing AI-based video creation tools similar to OpenAI’s Sora.
Aakash Sastry, the CEO and co-founder of Hotshot, shared the announcement in a post on X on Monday.
“In the last two years, our small team has developed three video foundation models—Hotshot-XL, Hotshot Act One, and Hotshot,” Sastry mentioned. “Working on these models has provided us insights into the imminent transformations in global education, entertainment, communication, and productivity. We are thrilled to expand these initiatives utilizing the world’s largest cluster, Colossus, within xAI!”
Based in San Francisco, Hotshot was founded a few years ago by Sastry and John Mullan. Initially, the startup concentrated on creating AI-driven photo generation and editing tools before shifting its focus to text-to-video AI models.
We have some exciting news – we’re pleased to share that @HotshotSupport has been acquired by @xAI 🚀
Over the past 2 years, our small team built 3 video foundation models – Hotshot-XL, Hotshot Act One, and Hotshot.
The training of these models has given us a glimpse into how global education… pic.twitter.com/W4rmYUxnMR
— Aakash (@aakashsastry) March 17, 2025
Prior to its acquisition, Hotshot managed to secure investments from venture capitalists, including Lachy Groom, Alexis Ohanian, co-founder of Reddit, and SV Angel. However, the company did not publicly disclose the specifics of its funding rounds.
The acquisition by xAI suggests that it may be planning to create its own video generation models to compete with rivals like Sora and Google’s Veo 2. Musk has previously indicated that xAI is working on video-generating models to enhance its Grok chatbot platform, mentioning during a livestream in January that the “Grok Video” model is expected to debut “in a few months.”
Hotshot announced on its website that it started the process of discontinuing new video creation on March 14. Existing users will have until March 30 to download videos created through the platform.
It remains unclear if the entire Hotshot team will transition to xAI. Sastry did not provide any comments on this matter.