Snap is spinning off an internal generative AI video team into an independent company called Dotmo. The new business will develop AI models for creating interactive gaming and entertainment experiences.
Snap cited the high cost of conducting this research internally as one reason for separating the operation. The arrangement allows the Snapchat owner to reduce its direct financial commitment while retaining exposure to the technology’s potential value.
Snap Employees Will Form Dotmo’s Initial Team
Dotmo’s founding team will consist of current Snap employees who are leaving the company to establish the new venture. Snap will licence technology developed internally to Dotmo for adaptation across gaming and interactive entertainment platforms.
Snap will not fund the startup directly. However, Chief Technology Officer Bobby Murphy will serve as its lead investor and hold a significant personal stake in the company.
Murphy will remain Snap’s full-time CTO and continue overseeing its generative AI research and development. His involvement creates a connection between the two companies without making Dotmo a conventional Snap division.
In exchange for the employees and technology licence, Snap will receive a large equity stake in Dotmo. The startup may also raise capital from outside investors as it develops its models and products.
Snap said Dotmo could become a commercial partner in the future when its technology aligns with the company’s needs. Its current work, however, is not considered part of Snap’s main business priorities.
Dotmo Follows the Specs Spinoff
Dotmo is Snap’s second major spinoff announced in 2026. The company previously created Specs Inc., a subsidiary focused on developing and commercialising its augmented reality glasses.
Snap recently began accepting preorders for Specs at $2,195. The glasses are expected to begin shipping in the United States, United Kingdom, and France during autumn 2026.
Unlike Dotmo, the Specs operation remains closely connected to one of Snap’s long-term hardware priorities. Dotmo will instead pursue digital entertainment experiences that extend beyond the company’s current products.
The spinoffs follow a wider cost-reduction programme at Snap. The company announced plans in April to eliminate around 1,000 jobs, representing approximately 16% of its workforce, and close more than 300 vacant positions.
Snap expects those measures to reduce annual expenses by more than $500 million. By separating Dotmo, the company can limit the cost of developing computationally intensive AI video models while maintaining a substantial ownership position if the startup succeeds.
Featured image credits: Blogtrepreneur via Flickr
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