Snap told TechCrunch that it has spun off its internal generative AI video team into an independent company, Dotmo, which will focus on gaming and interactive entertainment. Snap explained that continuing this type of R&D internally would have been too costly.
Dotmo shifts towards interactive entertainment
The new company, Dotmo, will develop AI models that can generate interactive gaming experiences. Although it operates legally independently, the team will maintain close ties with Snap.
As a result, Snap will license its technology to Dotmo, allowing it to adapt its existing technology to its gaming and interactive entertainment platforms. Dotmo's initial team will also consist of a group of existing employees who left Snap.
Snap retains equity exposure
In terms of funding, Dotmo will not receive direct investment from Snap. The company stated that Snap CTO Bobby Murphy will act as the lead investor in his personal capacity and will hold a significant personal stake in the new company.
Murphy will continue to serve as Snap's CTO full-time, overseeing the company's generative AI development. In exchange for talent and technology licensing, Snap will hold a significant stake in Dotmo and may share in its future growth.
Second business split this year
This marks Snap's second major spin-off this year. Earlier in 2026, Snap spun off its smart glasses business, Specs, into a separate company dedicated to developing that product line.
Snap stated that the difference between Dotmo and Specs is that the interactive digital experiences Dotmo provides are not currently a core business priority for the company. However, if their future directions align, the two companies may continue to collaborate.
Earlier this year, Snap also conducted a round of layoffs, cutting approximately 1,000 jobs. Judging from the continuous restructuring and personnel adjustments, Snap is attempting to divest some high-investment projects internally to reduce costs while preserving potential upside potential.
Additional information:TechCrunch noted that after Snap spun out Specs earlier this year, the market was concerned about the price of its smart glasses, which was around $2,200, and Snap's stock price was under pressure at one point.
