Elon Musk’s xAI Acquires AI Video Startup Hotshot to Compete with OpenAI’s Sora

On March 14, Elon Musk expanded his list of acquisitions by adding another start-up company, Hotshot, an AI video-generating tool, to xAI. The purchase price of the start-up has not been disclosed; however, the news came amid xAI’s seek to raise $10 billion in new funding, increasing the company’s value up to $75 billion.

In his post on X, Aakash Sastry, CEO and co-founder of Hotshot, enthusiastically announced that

“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, entertainment, communication, and productivity are about to change in the coming years. We’re excited to continue scaling these efforts on the largest cluster in the world, Colossus, as a part of xAI!”

HotShot is an AI video-generating tool developed in 2017 by Aakash Sastry and John Mullan. This San Francisco-based company initially focused on generating AI-powered photos and providing editing features but, over the years, specialized in text-to-video AI models. The company kept the size of its funding confidential; however, its prominent investors include Reddit co-founder Alexis Ohanian.

xAI’s acquisition of Hotshot seems to expand the AI company’s ability to develop its own video-generating models, similar to OpenAI’s Sora. It is important to note that last month, Musk offered a $97.4 billion bid to OpenAI, which was rejected by the former’s board of directors on the grounds of ‘not being in the best interests of OpenAI’s mission’.

xAI is an AI company, started by Elon Musk in 2023. Since then, it has launched its own chatbot, Grok, which is integrated with X. Additionally, xAI has also released a text-to-image model, Aurora. With the acquisition of Hotshot xAI seems to enter in text-to-video AI models, thus expanding the application of AI.

News for Hotshotters

Hotshot has officially announced on its website that the AI video-generating tool has been acquired by xAI, and the platform will no longer be available for new video creation. The start-up also gave its users a deadline to download their previously created videos before March 30, 2025.

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Munazza Shaheen
Munazza Shaheen
Munazza Shaheen is an AI and technology researcher with a deep interest in machine learning, automation, and emerging tech trends. Her work focuses on exploring the impact of artificial intelligence on industries, ethical AI development, and future innovations. She actively follows advancements in deep learning, robotics, and AI-driven solutions, contributing insights into how technology is shaping the world.

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