Snap Spins Off AI Video Team into New Company Dotmo

Snap will spin off an internal generative AI video team into a separate company, dubbed Dotmo, which will focus on developing AI models for interactive gaming experiences. The move is due to the high costs of conducting such work internally, Snap told TechCrunch. Dotmo will retain close ties to Snapchat, with Snap providing a license to adapt its technology for gaming and interactive entertainment platforms.

The initial Dotmo team will consist of current Snap staff who are leaving Snap to launch the new venture. Bobby Murphy, Snap's chief technology officer, will act as lead investor and have a significant personal stake in Dotmo, though he will continue to work for Snap full-time as its CTO and lead its GenAI research and development initiatives. In exchange for the talent and technology license, Snap will get a large equity stake in Dotmo, a position that could prove rewarding if the company prospers.

This move marks Snap's second major spinoff effort this year, following the spin-off of Specs, a smart glasses line, earlier in 2026. Snap also underwent a round of layoffs earlier this year, cutting around 1,000 jobs. Dotmo represents a different kind of spinoff, focusing on digital experiences outside Snap's core business priorities.

Why this matters: The spin-off of Dotmo highlights the challenges tech companies face in balancing innovation with cost management. By separating its AI video team into a new company, Snap can reduce the financial burden of developing cutting-edge technology while still maintaining exposure to potential upside through its equity stake. This move also underscores the growing importance of AI in creating immersive digital experiences, particularly in gaming and interactive entertainment.

As Dotmo explores outside funding and develops its own products, it will be interesting to see how Snap's equity stake influences its strategic decisions and whether the two companies will collaborate on future projects. For developers and businesses, this development suggests that AI-powered interactive experiences will continue to evolve, potentially leading to new opportunities for growth and engagement.