Elon Musk’s AI company, xAI, has acquired Hotshot, a startup that was developing AI-powered video generation tools similar to OpenAI’s Sora. Hotshot’s CEO and co-founder, Aakash Sastry, made the announcement on X on Monday.

“Over the past 2 years, we’ve built 3 video foundation models as a small team – Hotshot-XL, Hotshot Act One, and Hotshot,” Sastry wrote. “Training these models has given us insights into how global education, entertainment, communication, and productivity are going to change in the upcoming years. We’re thrilled to continue expanding these efforts on the world’s largest cluster, Colossus, as part of xAI!”

Based in San Francisco, Hotshot was founded a few years ago by Sastry and John Mullan. The startup initially focused on developing AI-powered photo creation and editing tools but later shifted its focus to text-to-video AI models.

Hotshot attracted investments from VCs like Lachy Groom, Reddit co-founder Alexis Ohanian, and SV Angel before being acquired. The company never publicly disclosed the size of its funding rounds.

xAI’s acquisition of Hotshot suggests that the former may be planning to develop its own video generation models to compete with Sora, Google’s Veo 2, and others. Musk has hinted in the past that xAI is working on video-generating models to add to its Grok chatbot platform. During a livestream in January, Musk mentioned that a “Grok Video” model is expected to be released “in a few months.”

Hotshot announced on its website that it started phasing out new video creation on March 14. Existing customers will have until March 30 to download the videos they’ve created using the platform. The company did not confirm if the entire Hotshot team would be joining xAI. Sastry chose not to comment.