Snap plans to spin off its internal generative AI video team as a separate company. The new company, called Dotmo, will focus on developing AI models that create interactive gaming experiences, Snap told TechCrunch.
Snap cited the high cost of doing this work in-house as one of the reasons for the spinoff.
Although technically a separate company, Dotmo maintains a close relationship with the creator of Snapchat. First, Snap will provide Dotmo with a license to adapt its technology into gaming and interactive entertainment platforms. At the same time, the initial Dotmo team will consist of a group of current Snap staff who are leaving Snap to start new businesses.
Additionally, while Dotmo will not receive direct funding from Snap, the company said that its chief technology officer, Bobby Murphy, will be the lead investor and will have a significant personal stake in the new company. Despite being a financial backer, Murphy will continue to work full-time as Snap’s CTO and continue to lead GenAI’s research and development initiatives.
In exchange for talent and technology licenses, Snap will acquire a significant stake in Dotmo, which could be a rewarding position if the company thrives in the future, the company said. Snapp said Dotmo may eventually seek outside funding as well.
The move marks Snap’s second major spinoff effort this year. In early 2026, Snap spun off Specs as a new company to focus on developing its smart glasses product line. (Snap’s recent announcement of Specs wasn’t necessarily a home run for the company; Snap’s stock price plummeted after concerns were raised about the hefty price tag of about $2,200 for its new smart glasses.) Snap also underwent a series of layoffs earlier this year, during which it cut about 1,000 jobs.
Dotmo is a different kind of spinoff from the Specs business, and its team will focus on developing digital experiences that are not currently part of Snap’s core business priorities, a Snap representative said. However, they added that the company may be considered as a partner in the future if the fit appears to be a good fit.
While spinoffs can be a cost-saving strategy for companies, they can also serve a variety of other purposes, such as showing off specific assets, attracting investor attention, and providing operational flexibility for the teams involved. By spinning out Dotmo, Snap may be reducing the financial burden associated with its AI efforts while maintaining exposure to potential profits through its own stock ownership.
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