Snap spins off AI video team into Dotmo — costs drive externalization

What happened

On June 18, Snap announced it will spin its generative AI video team into a standalone company, Dotmo, focused on AI models for interactive gaming experiences. The driver is cost: running this research in-house had become financially burdensome. CTO Bobby Murphy steps in as lead investor with significant personal stake, while continuing full-time at Snap.

Context and impact

Dotmo receives a technology license from Snap and starter staff from current Snap employees. In exchange, Snap keeps a large equity stake. This is Snap's second major spin-off of 2026, following the Specs AR glasses company. The strategy is clear: keep upside optionality via equity without booking the whole cost line in the parent P&L.

Details

• Parent: Snap
• Spin-off: Dotmo (AI models for interactive gaming)
• Lead investor: Bobby Murphy (Snap CTO), continuing in his Snap role
• Tech transfer: licence from Snap + starter staff
• Snap upside: large equity stake in Dotmo
• Context: second 2026 spin-off (after Specs AR glasses)