Snap spins off AI video team into new company, Dotmo, due to costs

Snap has spun off its internal generative AI video team into a new company, Dotmo, citing the high costs of conducting such work internally. Dotmo will focus on developing AI models capable of creating interactive gaming experiences. The initial team will consist of former Snap staff, and Snap will provide Dotmo with a license to adapt its technology for gaming and interactive entertainment platforms. In return, Snap will receive a large equity stake in Dotmo. This arrangement allows Snap to reduce its financial burden while retaining exposure to potential future success.

Snap’s chief technology officer, Bobby Murphy, will act as lead investor in Dotmo, holding a significant personal stake. However, Murphy will continue his full-time role at Snap, leading its GenAI research and development initiatives. Dotmo may also seek outside funding in the future.

This is Snap’s second major spinoff this year, following the earlier separation of Specs to focus on smart glasses. While Dotmo represents a different kind of spinoff, focusing on digital experiences outside Snap’s core priorities, it could still be considered a future partner if the fit is right. Spinoffs like Dotmo can serve as a cost-savings strategy, offering operational flexibility and potential for investor attention.