Snap announced in 2026 that it is spinning off an internal generative AI video team into a new, separate company called Dotmo. The new venture will focus on developing AI models designed to create interactive gaming experiences, Snap told TechCrunch.
Snap cited the high costs of conducting AI video work internally as a primary reason for the spinoff. The initial Dotmo team will consist of current Snap employees who are leaving the company to launch the new venture.
Although Dotmo will operate independently, it will maintain close ties to Snap. The social media company will provide Dotmo with a license to adapt its technology for gaming and interactive entertainment platforms and will receive a large equity stake in Dotmo in return. Snap will not fund Dotmo directly, but Bobby Murphy, Snap’s chief technology officer, will serve as lead investor and hold a significant personal stake in the new firm. Murphy will continue in his full-time CTO role at Snap, where he also leads its generative AI research and development efforts. Dotmo may also seek outside funding in the future, Snap said.
The move marks Snap’s second major spinoff in 2026. Earlier this year, Snap spun off its smart glasses line into a separate company called Specs. That launch drew scrutiny over the product’s roughly $2,200 price tag, and Snap’s stock declined following the announcement. Snap also cut approximately 1,000 jobs earlier in 2026.
A Snap representative described Dotmo as distinct from the Specs spinoff, noting that its team will focus on digital experiences outside Snap’s current core business priorities, though the company could still become a partner in the future if the fit seems right.
By spinning out Dotmo, Snap may be reducing the financial burden of its AI efforts while retaining exposure to potential upside through its equity position in the new company.
Source: TechCrunch