Elon Musk's AI company, xAI, recently acquired video generation startup Hotshot, marking a significant move by Musk into AI video generation. Hotshot CEO and co-founder Aakash Sastry officially announced the news on the social media platform X (formerly Twitter) on Monday.

In the announcement, Sastry stated: "Over the past 2 years, as a small team, we've built 3 video foundational models—Hotshot-XL, Hotshot Act One, and Hotshot. Training these models has given us a glimpse into how global education, entertainment, communication, and productivity will change in the coming years. As part of xAI, we're excited to continue scaling this work on the world's largest cluster, Colossus!"

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Image Source Note: Image generated by AI, licensed through Midjourney.

San Francisco-based Hotshot, founded by Sastry and John Mullan, initially focused on AI-powered photo creation and editing tools before shifting to text-to-video AI model development. Before the acquisition, Hotshot secured funding from investors including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel, though the exact amount raised was never publicly disclosed.

This acquisition suggests Musk plans to build his own video generation model, directly competing with offerings like OpenAI's Sora and Google's Veo2. Musk previously hinted that xAI was developing a video generation model to be added to its Grok chatbot platform. In a livestream this January, he predicted a "Grok video" model would be released "in a few months."

According to a Hotshot website announcement, the company ceased creating new videos on March 14th. Existing customers had until March 30th to download videos created using the platform. It remains unclear whether all Hotshot team members have joined xAI; Sastry declined to comment on this.