Snap launches Dotmo: video AI becomes an independent entity

Snap Embarks on a New Adventure with Dotmo

Snap has decided to transform one of its internal teams specializing in generative AI video into an independent company. This new entity, named Dotmo, will focus on developing AI models aimed at creating interactive gaming experiences. This decision was shared by Snap in an announcement to TechCrunch.

The main motivation behind this separation lies in the high costs associated with managing such projects internally. By outsourcing this activity, Snap hopes to optimize its resources while continuing to explore the potential of AI in the entertainment sector.

Dotmo: An Independent Company but Linked to Snap

Although Dotmo is now a distinct entity, it will maintain close ties with Snap, the creator of Snapchat. Indeed, Snap will provide Dotmo with a license to use its technology in the development of interactive gaming and entertainment platforms. Additionally, Dotmo's founding team will consist of former Snap employees who have chosen to join this new venture.

Dotmo will not receive direct funding from Snap. However, Bobby Murphy, Snap's Chief Technology Officer, will play a key role as the principal investor. He will hold a significant personal stake in Dotmo while continuing to fulfill his responsibilities at Snap, particularly in the area of research and development in GenAI.

A Diversification Strategy for Snap

In exchange for providing talent and technology licenses, Snap will obtain a significant stake in Dotmo. This position could prove very advantageous if Dotmo succeeds in establishing itself in the market. Snap has also mentioned the possibility for Dotmo to seek external funding in the future.

This initiative is not Snap's first this year. Earlier, in 2026, Snap had already spun off Specs, a division dedicated to the development of smart glasses. This move aimed to focus exclusively on this product line. However, the mixed reception of the new glasses, sold for around $2,200, led to a decline in Snap's stock. At the same time, the company proceeded with layoffs, cutting approximately 1,000 jobs.

Dotmo: A Distinct Project but Potentially Complementary

Unlike the separation of Specs, Dotmo will focus on digital experiences that are not currently at the core of Snap's priorities. A representative from Snap indicated that Dotmo could become a strategic partner if an opportunity arises.

Business separations can often be motivated by cost-saving strategies, but they also serve to highlight specific assets, attract investor attention, or offer greater operational flexibility. With Dotmo, Snap hopes to lighten its financial burden related to AI while keeping a foothold in this promising field through its stake in the new company.