According to TechCrunch, Snap is spinning off its internal generated AI video team into a separate company called Dotmo, with the goal of advancing AI technology for interactive gaming experiences while reducing costs associated with developing the technology in-house.
Dotmo will operate as an independent company but will maintain a close relationship with Snap. The company will receive a license to use and adapt Snap’s technology for gaming and interactive entertainment applications. The founding team will also consist of existing Snap employees who are leaving to launch the new business.
Bobby Murphy, Snap’s chief technology officer, will serve as Dotmo’s lead investor through a personal investment and will own a significant stake in the company. However, Murphy will continue in his role at Snap and will continue to be responsible for the company’s generative AI research and development.
In exchange for the talent and technology rights, Snap will receive a significant equity position in Dotmo. The startup may also consider raising funding from external investors at a later stage, the company said.
The Dotmo deal marks Snap’s second major spinout plan this year. In early 2026, the company separated its Specs smart glasses business into an independent entity focused solely on wearable hardware development.
Snap has cut its workforce again this year, cutting about 1,000 jobs.
A Snap representative told TechCrunch that Dotmo will be different from the Specs spinout because it will focus on creating digital experiences outside of the company’s current core business priorities. However, the representative added that Dotmo may work with Snap in the future if the opportunity arises.
The move will allow Snap to reduce the financial burden of pursuing certain AI projects while maintaining exposure to future value creation through ownership of the new company.
Read more: Snap SPECS vs. Meta Ray-Ban Display: Two strategies emerge in race for smart glasses supremacy
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