Elon Musk’s xAI Acquires Video Generation Startup

Elon Musk’s AI company, xAI, has acquired the startup Hotshot, which develops AI-based tools for video generation similar to Sora by OpenAI.

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

Over two years, Hotshot has developed three video models: Hotshot-XL, Hotshot Act One, and Hotshot, as reported by the company’s CEO, Aakash Sastry.

“Training these neural networks has allowed us to understand how global education, entertainment, communication, and productivity will change in the coming years. We are excited to continue scaling our efforts on the world’s largest cluster, Colossus, within xAI,” he stated. 

Elon Musk noted that a “cool video AI” will soon emerge. The acquisition of Hotshot suggests xAI aims to develop its own video generation models to compete with Sora, Veo 2 by Google, and other solutions. In January, Musk stated that he expects the Grok Video model to appear “in a few months.”

Based in San Francisco, Hotshot was founded several years ago. Initially, the startup focused on developing AI tools for creating and editing photos but eventually shifted to AI models for text-to-video conversion.

In February, xAI introduced the third version of Grok. The updated product features enhanced capabilities, including image generation and data analysis from the internet.