Snap is spinning off its internal generative AI video team into a standalone company called Dotmo, with the new venture aimed at building AI models that power interactive gaming experiences. The Snapchat parent company confirmed the move to TechCrunch on June 18, citing the steep costs of running such research internally as a driving factor behind the separation. While Dotmo will operate independently, it will maintain close ties to Snap through a technology licensing deal that gives it access to Snap's tools for gaming and interactive entertainment platforms.
The initial Dotmo team will be made up of Snap employees who are leaving the company to launch the new venture, and the firm has secured high-profile backing from Snap co-founder and Chief Technology Officer Bobby Murphy. Murphy will serve as lead investor with a significant personal financial stake, though he will remain in his full-time role at Snap and continue overseeing its broader GenAI research and development efforts. In exchange for the talent and the technology license, Snap will receive a large equity position in Dotmo, and the new company may eventually pursue outside funding as it scales.
The Dotmo separation marks Snap's second notable spinoff of 2026, following the earlier spin-out of its Specs smart glasses division. That unit debuted hardware priced around $2,200, a price point that triggered a sharp selloff in Snap's stock shortly after the unveiling. The broader year has been turbulent for the company, which also carried out layoffs affecting roughly 1,000 employees earlier in 2026.
Unlike Specs, which extends directly from Snap's consumer hardware ambitions, Dotmo is being positioned around digital experiences that fall outside Snap's core business priorities, according to a company representative. That distinction could leave room for Dotmo to eventually partner with Snap down the line if the strategic fit emerges. For now, the carve-out gives Snap a way to offload expensive exploratory work while retaining a financial upside if Dotmo's gaming-focused AI bet pays off — a structure that reflects a growing willingness among big tech firms to monetize speculative projects through spinouts rather than absorbing their costs on the balance sheet.