AI-powered services have made enormous strides since ChatGPT revolutionized the segment a few years ago. OpenAI’s chatbot boasted incredible capabilities that have since been already far surpassed. Some companies have focused on multimedia—images and videos—generation models. Elon Musk’s xAI seems to be getting serious with its latest acquisition: the generative AI video startup Hotshot.
xAI’s acquisition of a generative AI video startup suggests major improvements for Grok
“Over the past two years, we’ve built three video foundation models as a small team—Hotshot-XL, Hotshot Act One, and Hotshot,” said Aakash Sastry, Hotshot’s CEO and co-founder, about the development. “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,” he added.
Hotshot was born as a startup to develop image generation and editing tools. However, the company later moved into generative AI for videos. It had already caught the attention of major investors, receiving funding from Reddit co-founder Alexis Ohanian, Lachy Groom, and SV Angel.
It’s expected that Hotshot’s capabilities will eventually come to Grok. That said, there are no details yet on it. It’s noteworthy that the Hotshot website stopped allowing the creation of new videos on March 14th. This was a hint of what was to come. Hotshot’s users have until March 30th to download all their generated videos.
Some news – We’re excited to announce that @HotshotSupport has been acquired by @xAI 🚀
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,… pic.twitter.com/W4rmYUxnMR
— Aakash (@aakashsastry) March 17, 2025
Grok AI wants to stand up to the big boys
When it comes to artificial intelligence, it seems that xAI, Grok’s parent company, is a bit underrated. Perhaps due to its nature as a product, it was, for a long time, only accessible through the X app. To try to address this, this year the company launched a dedicated iOS app in some countries and opened registrations for an Android app. However, for a significant period, the Grok chatbot was exclusively accessible to X paid subscribers. This inevitably reduced its impact and reach compared to the “free-to-use” model of its competitors.
That said, Grok 3 recently arrived with impressive capabilities. It even integrates deep research and “reasoning” tools for the most demanding queries. The AI-powered chatbot can also generate images from a prompt. In January, Elon Musk teased his intentions to integrate video-related features into Grok. The recent acquisition of Hotshot by xAI appears to align with these intentions.
OpenAI has an AI video generation tool: Sora. ByteDance, TikTok’s parent company, surprised everyone this year with the announcement of its OmniHuman-1 AI model for video generation. Even Google has its own text-to-video AI model: Veo. Therefore, XAI seems to want to seriously compete for the throne of the best artificial intelligence platform, which involves keeping up with its rivals.
