Snap spins off AI video team into new company Dotmo

Snap is spinning off an internal generative artificial intelligence video team into a separate, newly formed company called Dotmo. According to Snap, the new entity will focus on developing AI models that can create interactive gaming experiences. The parent company cited the high costs of conducting generative AI work internally as one of the reasons for the spinoff. In exchange for the talent and a technology license, Snap will get a large equity stake in Dotmo, a position that could prove rewarding if the company prospers in the future. Additionally, Bobby Murphy, Snap’s Chief Technology Officer, will act as the lead investor and will have a significant personal stake in the new firm. Murphy will continue to work full-time for Snap as its Chief Technology Officer and will continue to lead its generative AI research and development initiatives.

The launch of Dotmo marks Snap’s second major spinoff effort this year. Earlier in 2026, Snap spun off Specs, its smart glasses line, into a new company to focus exclusively on developing the hardware. That spinoff followed market scrutiny and a drop in Snap’s stock price after concerns were raised about the price tag attached to the new smart glasses, which is around $2,200. Alongside these structural changes, Snap underwent a round of layoffs earlier in 2026, during which some 1,000 jobs were cut.

While Dotmo will operate as a separate business, it will maintain close ties to Snap. To support the transition, Snap will provide Dotmo with a license to adapt its technology for gaming and interactive entertainment platforms. The initial Dotmo team will consist of a group of current Snap staff who are leaving the company to launch the venture. Although Dotmo will not be funded directly by Snap, the new company may eventually seek outside funding in the future. A Snap representative stated that Dotmo represents a different kind of spinoff than the Specs operation, focusing on digital experiences that are not currently part of Snap’s core business priorities, though it could still be considered a partner in the future if the fit seems right.

Why it matters

This move highlights Snap’s shift toward a leaner operational model, using spinoffs to shed the financial burden of research and development while keeping a stake in the potential success of its former internal projects.