Snap spins off internal AI video team into separate company Dotmo

Snap announced it is spinning off its internal generative AI video team into a separate company named Dotmo, citing the high costs of conducting such work internally as a primary reason for the move. Dotmo will focus on developing AI models capable of creating interactive gaming experiences, according to a company spokesperson.

Dotmo will operate as a technically separate entity but maintain close ties to Snap. The social media company will license its technology to Dotmo for use in gaming and interactive entertainment platforms. In return, Snap will receive a large equity stake in the new firm, which could appreciate if Dotmo succeeds.

The initial team behind Dotmo will consist of current Snap employees who are leaving the company to launch the venture. Snap’s chief technology officer, Bobby Murphy, will act as the lead investor in Dotmo and hold a significant personal stake in the new company. Murphy will continue to work full-time at Snap, leading its generative AI research and development initiatives.

Dotmo may eventually seek outside funding, Snap said, though the company did not provide further financial details. The spinoff represents Snap’s second major restructuring effort in 2026, following the earlier spin-off of its smart glasses unit, Specs, which faced market skepticism due to its high price point.

A Snap representative noted that Dotmo’s focus on AI video development is not part of the company’s core business priorities, but added that Dotmo could still be considered a future partner if opportunities align. Spin-offs like Dotmo can serve multiple purposes, including cost reduction, operational flexibility, and maintaining exposure to potential upside through equity stakes.