xAI, Elon Musk's AI company, has acquired Hotshot, a San Francisco-based startup focused on generative AI video tools.

The company, founded by Aakash Sastry and John Mullan, initially developed AI-driven photo editing tools but shifted its focus to text-to-video AI models.

Hotshot's video foundation models, such as Hotshot-XL and Hotshot Act One, have already gained significant attention in the AI industry.

The acquisition is expected to boost xAI's plans to develop its own video generation models, competing with major competitors like OpenAI's Sora and Google's Veo 2.

Musk had previously hinted at the creation of a 'Grok Video' model, which he anticipates launching in the near future. Hotshot's team will likely play a key role in scaling these efforts, using xAI's powerful infrastructure, including the Colossus cluster.

Hotshot's website has confirmed the sunsetting of its video creation tools as of March 14, with existing customers having until March 30 to download their content.

The specifics of the staff transition to xAI remain unclear, with Sastry declining to comment. This acquisition represents a significant step for xAI in the rapidly evolving generative AI space.