Musk's xAI buys Hotshot for text-to-video capabilities

Elon Musk's xAI has acquired Hotshot, a San Francisco-based startup specializing in AI-powered video generation tools – a move that positions xAI to compete directly with industry leaders like OpenAI's Sora and Google's Veo 2 in the rapidly-evolving generative AI market.

Tackling text-to-video: Hotshot, co-founded by Aakash Sastry and John Mullan, initially focused on AI-driven photo creation and editing tools before pivoting to text-to-video AI models. Over the past two years, the company developed three video foundation models—Hotshot-XL, Hotshot Act One, and Hotshot—enabling users to create short, high-quality videos from simple text prompts.

"Training these models has given us a look into how global education, entertainment, communication, and productivity are about to change in the coming years," Sastry posted on X. "We're excited to continue scaling these efforts on the largest cluster in the world, Colossus, as a part of xAI!"

Hotshot investors: Prior to its acquisition, Hotshot attracted investments from notable venture capitalists, including Reddit co-founder Alexis Ohanian, Lachy Groom, and SV Angel. Although the company did not publicly disclose the size of its funding rounds, the caliber of its investors suggests strong industry confidence in Hotshot's technology and potential impact on AI-driven content creation.

Watch this space: The integration of Hotshot's technology is expected to enhance xAI's Grok chatbot platform. During a livestream in January, Musk hinted at the development of a "Grok Video" model in the coming months.