Snap is spinning off an internal generative AI video team into a separate company called Dotmo, a move the company says is driven by the high costs of developing such technology internally. The new entity will focus on building AI models for interactive gaming experiences, Snap confirmed to TechCrunch.
While technically a separate company, Dotmo will maintain close ties to its parent. Snap will provide Dotmo with a license to adapt its technology for gaming and interactive entertainment platforms. The initial team will consist of current Snap staff who are leaving the company to launch the venture.
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Bobby Murphy Leads Investment in Dotmo
Snap’s chief technology officer, Bobby Murphy, will act as the lead investor for Dotmo and will hold a significant personal stake in the new firm. Despite this financial backing, Murphy will remain at Snap full-time as CTO, continuing to lead its generative AI research and development initiatives. In exchange for the talent and technology license, Snap will receive a large equity stake in Dotmo, a position that could prove rewarding if the company succeeds. Dotmo may also seek outside funding in the future, Snap said.
Snap’s Second Major Spinoff of 2026
This marks Snap’s second major spinoff this year. Earlier in 2026, Snap spun off its Specs smart glasses line into a separate company. That move came after Snap’s stock fell following concerns about the $2,200 price tag of its new smart glasses. Snap also underwent a round of layoffs earlier this year, cutting approximately 1,000 jobs.
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A Snap representative said Dotmo represents a different kind of spinoff than Specs, as its team will focus on digital experiences that are not currently part of Snap’s core business priorities. However, the company could still be considered a partner in the future if the fit seems right.
Spinoffs as a Cost-Savings Strategy
Spinoffs can serve multiple purposes for companies, including reducing financial burden, generating investor attention, or providing operational flexibility to a team. In spinning out Dotmo, Snap appears to be lowering the costs associated with its AI efforts while maintaining exposure to potential upside through its equity stake.
Frequently Asked Questions
Why is Snap spinning off its AI video team?
Snap cited the high costs of conducting generative AI work internally as the primary reason for the spinoff.
What will the new company, Dotmo, focus on?
Dotmo will develop AI models specifically for creating interactive gaming and entertainment experiences.
Will Dotmo remain connected to Snap?
Yes, Snap will have a large equity stake in Dotmo and will license its technology to the new company. Snap’s CTO, Bobby Murphy, is also the lead investor.
