Snap is turning part of its generative AI work into a new company. The separate business, called Dotmo, will focus on AI models for interactive gaming experiences, while Snap keeps financial exposure to the venture through an equity stake.
What Dotmo will do
Dotmo is being built around an internal Snap team that has been working on generative AI video. The company told TechCrunch that Dotmo will concentrate on models capable of creating interactive gaming experiences.
That makes the new venture different from a simple product team moving to a new name. Dotmo is being set up as a separate company with its own focus: gaming and interactive entertainment platforms.
Snap will still have a role in the technology behind the business. The company will provide Dotmo with a license to adapt its technology for gaming and interactive entertainment platforms.
The initial team will come from Snap itself. Current Snap staff will leave the company to launch Dotmo, giving the new business a starting point in both talent and technical work already developed inside Snap.
Why Snap is spinning it out
Snap cited the high costs of conducting this kind of work internally as one reason for the spinoff. Generative AI development can place a heavy burden on a company when it is kept inside the core business, especially if the work is not central to the company’s current priorities.
Dotmo gives Snap a way to keep the work alive without carrying it in the same way on its own books. The company may be reducing the financial burden tied to its AI efforts while still keeping a position that could benefit it later.
That position comes through equity. In exchange for the talent and the technology license, Snap said it will receive a large equity stake in Dotmo.
If Dotmo succeeds, that stake could become valuable for Snap. If the work remains costly, the separate structure may give Snap more room to manage the expense and direction of the project.
How Snap stays connected
Dotmo will not be funded directly by Snap, but the relationship between the two companies will remain close. Bobby Murphy, Snap’s chief technology officer, will act as lead investor in Dotmo and will have a significant personal stake in the new firm.
Murphy’s role does not mean he is leaving Snap. The company said he will continue to work full-time as its CTO and continue to lead its GenAI research and development initiatives.
That creates a structure with several links between Snap and Dotmo:
- Dotmo’s first team will be made up of current Snap staff leaving to launch the venture.
- Snap will license technology to Dotmo for gaming and interactive entertainment platforms.
- Bobby Murphy will act as lead investor while remaining Snap’s full-time CTO.
- Snap will receive a large equity stake in Dotmo.
Dotmo may also eventually seek outside funding, Snap said. That could give the new company access to capital beyond Snap’s own balance sheet, while keeping Snap tied to any future upside through its stake.
A second major spinoff this year
Dotmo is Snap’s second major spinoff effort this year. Earlier in 2026, Snap spun off Specs into a new company focused exclusively on the development of its smart glasses line.
The Specs spinoff followed a difficult reaction to Snap’s recent unveiling of the smart glasses. Snap’s stock tanked after concerns were raised about the price attached to the new smart glasses, which is around $2,200.
Snap also went through layoffs earlier this year, during which some 1,000 jobs were cut. Together, those moves show a company separating certain ambitious projects from its main operations while also managing costs.
Dotmo is not the same type of spinoff as Specs. A Snap representative said Dotmo’s team will focus on developing digital experiences that are not currently part of Snap’s core business priorities.
Still, the representative added that Dotmo could be considered a partner in the future if the fit seems right. That leaves open the possibility that Dotmo’s work could connect back to Snap later, even if it begins life outside the company.
What the move signals
Spinoffs can be used as a cost savings strategy, but they can also serve other purposes. They may help highlight a particular asset, draw investor attention, or give a team more operational flexibility.
In Dotmo’s case, the cost issue is central. Snap is moving a costly internal AI video effort into a company that can pursue a narrower opportunity in interactive gaming experiences.
At the same time, Snap is not walking away from the work. The technology license, equity stake, and Murphy’s personal investment all keep the company connected to Dotmo’s future.
The result is a structure that reduces Snap’s direct load while preserving a route to participate if Dotmo’s AI models for gaming and interactive entertainment gain traction.