Elon Musk’s AI company, xAI, recently acquired a startup called Hotshot, which was developing AI-powered video generation tools.
Hotshot was founded in 2017 by Aakash Sastry and John Mullan. The startup has developed three video foundation models – Hotshot-XL, Hotshot Act One, and Hotshot – over the past two years.
With these models, users can create videos up to 10 seconds in 720p resolution from text prompts. This acquisition of xAI indicates that the company plans to develop its own video generation models to compete with platforms like OpenAI’s Sora and Google’s Veo 2.
These models have demonstrated AI’s potential in transforming sectors such as education, entertainment, communication, and productivity.
Announcement of the Acquisition
On March 17, 2025, Aakash Shastri announced the acquisition on his X account and talked about integrating Hotshot’s technology with xAI’s resources. He highlighted the opportunity to scale their efforts using xAI’s supercomputers.
xAI Vision and Grok 3
Founded by Elon Musk in 2023, xAI aims to advance scientific discovery and deepen our understanding of the universe. The company’s flagship AI model, Grok 3, combines superior reasoning with extensive pretraining knowledge. The model is available on various platforms, including the web, iOS, and Android, and offers features such as image generation.
Strategic implications of the acquisition
By acquiring Hotshot, xAI positions itself to compete with other AI video generation platforms such as OpenAI’s Sora and Google’s Veo 2. This strategic move is in line with Musk’s vision to integrate advanced AI capabilities into xAI’s offerings, potentially expanding the functionalities of the Grok platform.
Transition for Hotshot users
Hotshot announced on their official website that it would stop accepting new video creations from March 14, 2025. Existing users can download their previously created videos until March 30, 2025. This transition reflects a shift in focus towards integrating Hotshot’s technology into xAI’s broader AI initiatives. They also said that they are excited to continue scaling the efforts on the largest cluster in the world, Colossus, as part of xAI.
Role of Colossus
An important aspect of this acquisition is the use of xAI’s supercomputer, Colossus. Built in Memphis, Tennessee, Colossus becomes fully operational in December 2024 and is considered one of the largest supercomputers in the world. Integrating Hotshot’s video generation model with the computational power of Colossus could lead to advancements in AI-generated video content, which further provides more sophisticated and efficient solutions.
Future prospects
XAI wants to add Hotshot’s technology into its ecosystem opens up many possibilities. With combined expertise and resources, xAI can develop advanced AI video generation models that meet the needs of various industries, from entertainment to education. This acquisition also reflects a broader trend of AI companies integrating technologies to provide more comprehensive solutions.
