Snap spins off its AI division into separate company Dotmo

01:56 / 19.06.2026·28·Technology

Snap, the owner of the popular Snapchat messenger, has announced that it is turning its internal division focused on AI-based video technologies into an independent entity. The new company, named Dotmo, will specialize in developing AI models capable of creating interactive gaming experiences. This move is driven not only by strategic expansion but also by the high financial costs of advanced technological research. This is reported by Techcrunch.com news reports.

According to TechCrunch, Snap admitted that conducting such work using internal resources has become excessively expensive. Although Dotmo is technically a separate company, it will maintain close ties with Snapchat. Specifically, Snap will grant the new startup a license to adapt its technologies for gaming and interactive entertainment platforms.

Financial strategy and personnel exchange

The team for the new project will primarily consist of current Snap employees. They will leave their positions to focus entirely on the development of Dotmo. Interestingly, Snap is not funding the new company directly. Instead, Snap's CTO Bobby Murphy will act as the lead investor, holding a significant stake in the project with his personal funds.

Bobby Murphy will remain in his primary role and continue to lead GenAI research within Snap. In turn, Snap will acquire a significant portion of Dotmo's shares in exchange for personnel and licensing. If the new startup succeeds in the future, it is expected to bring substantial profit to the parent company.

Steps toward cost reduction

This is Snap's second major spin-off this year. Previously, the company also spun off Specs, its smart glasses division. At that time, the high price of $2,200 for Specs glasses caused concern among investors and led to a drop in Snap's share price.

Company representatives explained that the Dotmo team will focus on creating digital experiences that do not fall within Snap's core business priorities. However, it is not ruled out that these developments may be integrated into the Snapchat ecosystem in the future. Such a spin-off strategy provides companies with the following opportunities:

Reducing the financial burden and optimizing costs;
Making specific technological assets more visible to investors;
Giving the team operational flexibility and freedom;
Simplifying the process of attracting external investments.

Given that Snap has cut nearly 1,000 employees this year, turning the Dotmo project into a separate company is seen as a measure to maintain financial stability without abandoning innovation. Dotmo will now also have the right to attract external investors independently.