xAI, the artificial intelligence company founded by Elon Musk, has recently acquired Hotshot, a startup focused on developing AI-powered video generation tools. Hotshot's business direction is similar to OpenAI's Sora.

Hotshot's CEO and co-founder Akshay Sastri announced the news Monday on the X platform. He stated that over the past two years, the Hotshot team has developed three foundational video models: Hotshot-XL, Hotshot Act One, and Hotshot. The training of these models has given the team deeper insights into how the fields of global education, entertainment, communications, and productivity will transform in the coming years.

Founded several years ago and headquartered in San Francisco, Hotshot was co-founded by Sastri and John Mullen. Initially, the company concentrated on developing AI-driven photo creation and editing tools before shifting its focus to text-to-video AI model development.

Prior to its acquisition, Hotshot successfully attracted investments from venture capitalists including Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel. However, the company never publicly disclosed the scale of its funding rounds.

The acquisition of Hotshot by xAI could signal plans to build its own video generation model to compete with rivals like Sora and Google's Veo 2. Previously, Musk hinted that xAI was developing a video generation model to expand the capabilities of its Grok chatbot platform. During a live stream in January, Musk mentioned that the "Grok Video" model was expected to launch within "a few months."

Hotshot announced on its website that it began phasing out new video creation services starting March 14. Existing customers will have until March 30 to download videos they created using the platform.

It remains unclear whether all of Hotshot's employees will join xAI. Sastri declined to comment on the matter.