Xai, an AI company for Elon Musk, has acquired Hotshot, a startup working on AI-powered video generation tools along Openai’s Sora line.
Hotshot CEO and co-founder Aakash Sastry announced the news in an X post on Monday.
“For the past two years we’ve built three video foundation models as a small team: Hotshot-XL, Hotshot Act One, Hotshot,” writes Sastry. “Training these models has been able to explore how global education, entertainment, communication and productivity is about to change over the next few years. As part of Xai, we are delighted to continue to expand these efforts with Colossus, the world’s largest cluster!”
San Francisco-based Hotshot was founded several years ago by Sastry and John Mullan. The startup initially focused on developing AI-powered photo creation and editing tools, but ultimately pivoted in favor of text-to-video AI models.
Some news – I look forward to announce that @hotshotsupport has been acquired by @xai 🚀
Over the past two years we have built three video foundation models as a small team. HotShot-XL, Hotshot Act One, Hotshot.
How did training these models consider global education?…pic.twitter.com/w4rmyuxnmr
– Aakash (@aakashsastry) March 17, 2025
Hotshot was able to withdraw investments from VCs such as Lachy Groom, Reddit co-founders Alexis Ohanian and SV Angel. The company never made public the size of its funding round.
Xai’s Hotshot acquisition could indicate that the former plans to build its own video generation model to compete with Sora, Google’s Veo 2 and others. Musk previously suggests that Xai is developing a video generation model to add to the Grok Chatbot platform. During the live stream in January, Musk said he expects the “Grok Video” model to be released “in a few months.”
Hotshot said on its site it began making new videos on March 14th to sunset. Existing customers will be downloading videos created using the platform by March 30, the company added.
It was not immediately known whether all the Hot Shot staff would be participating in Xai. Sastry declined to comment.
