XAI acquires AI video generation startup Hotshot – News

Elon Musk’s xAI Corp. has acquired Hotshot, a startup that develops artificial intelligence models optimized for video generation tasks.

Hotshot Chief Executive Officer Aakash Sastry announced the deal today in a post on X. The financial terms were not detailed. The company previously raised an undisclosed amount of funding from Reddit Inc. co-founder Alexis Ohanian, SV Angel and other investors.

Hotshot, officially Natural Synthetics Inc., launched in 2023 with an AI-powered image generation and editing tool. The company pivoted the following year with the launch of a video generation model. The algorithm can generate 10-second clips with a resolution of 1280 by 720 pixels.

The company trained its model on a dataset of 600 million clips. During the development process, it built a second neural network to automatically generate captions for those clips. Captions make it easier for AI models to understand videos, which in turn streamlines the training workflow.

Hotshot configured its video generator to use the bfloat16 data format. The format makes it possible to compress 32 bits’ worth of information into 16 bits, which decreases the amount of data that AI models have to process during calculations. The resulting efficiency improvements help speed up training.

The video generator was trained for four months using several thousand of Nvidia Corp.’s A100 graphics processing units. That’s a small fraction of the 200,000 Nvidia chips xAI has installed in Colossus, the supercomputer it uses to power its AI models. In the X post announcing the acquisition, Sastry wrote that Hotshot will ”continue scaling” its video generator development efforts using Colossus.

The supercomputer runs in a 750,000-square-foot Memphis facility that previously hosted a home appliance plant. The initial version of Colossus came online last September with 100,000 graphics cards. The current iteration, which includes more than 1 exabyte of storage alongside its 200,000 chips, launched three months later.

Earlier this year, xAI acquired a second site in Memphis to support infrastructure upgrades. The company hopes to boost Colossus’ graphics card count to 1 million by year’s end. As part of the effort, xAI has reportedly held talks with Dell Technologies Inc. about buying more than $5 billion worth of AI servers.

The company’s move into video generation is not unexpected. In January, Elon Musk reportedly stated that xAI plans to release a video generation model within a few months. The company will presumably offer the algorithm via its application programming interface alongside Grok, its flagship large language model series. 

Image: Hotshot