Snap is spinning off its internally generated AI video team into a separate company. The new company, called Dotmo, will focus on developing AI models that can create interactive gaming experiences, Snap told TechCrunch.
Snap cited the high cost of doing this work internally as one of its reasons for the spinoff.
Although technically a separate company, Dotmo maintains a close relationship with the creators of Snapchat. First, Snap will provide Dotmo with a license to apply its technology to gaming and interactive entertainment platforms. At the same time, the initial Dotmo team will be comprised of a group of current Snap employees who are leaving Snap to start new ventures.
Additionally, while Dotmo will not receive direct funding from Snap, Chief Technology Officer Bobby Murphy will serve as a major investor and will have a significant personal stake in the new company, the company said. Although he is a financial backer, Murphy will continue to work full-time as Snap’s CTO and continue to lead GenAI research and development initiatives.
Snap will take a large stake in Dotmo in exchange for talent and technology licenses, the company said. This is a position that can be rewarding if the company prospers in the future. Dotmo may eventually seek external funding, Snap said.
The move marks Snap’s second major spinoff effort this year. In early 2026, Snap spun off Specs into a new company to focus solely on developing its line of smart glasses. (Snap’s recent Specs reveal wasn’t exactly a home run for the company; Snap’s stock price tumbled after concerns were raised about the high price tag attached to the new smart glasses, which cost about $2,200.) Snap also experienced layoffs earlier this year, during which about 1,000 employees were laid off.
Dotmo represents a different kind of spinoff from the Specs operation in that it will focus on developing digital experiences that are not currently among Snap’s core business priorities, a Snap representative said. However, they may still be considered partners in the future if they see fit, they added.
Spinoffs can be a cost-saving strategy for a company, but they can also be used for a variety of other purposes, including showing off certain assets, generating investor interest, and providing operational flexibility to the teams involved. Spinning off Dotmo allows Snap to reduce the financial burden associated with its AI efforts while still retaining exposure to potential upside through an equity stake.
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