Snap Divides Again: After Layoffs Comes the Spin-Off of Generative AI
Snap Divides Again: After Layoffs Comes the Spin-Off of Generative AI
Snap has announced the creation of a new independent company called Dotmo, born from the spin-off of an internal team specialized in developing generative artificial intelligence technologies for video content production. The new company will be responsible for developing AI models capable of creating interactive gaming experiences and new forms of digital entertainment.
According to Snap, one of the main motivations behind the decision is the high costs associated with internally supporting this type of research and development. Through the spin-off, the company aims to reduce the financial burden of its AI-related activities while still maintaining a strategic position within the project.
Although Dotmo will formally be a separate company, it will continue to maintain close ties with Snap. The company will indeed receive a license that will allow it to adapt and utilize the technology developed by Snap for platforms dedicated to gaming and interactive entertainment. Additionally, the initial core of Dotmo will consist of employees currently employed at Snap who will leave the company to start the new initiative.
Further Details on Dotmo, the New Team Spun Off from Snap
An important role will be played by Bobby Murphy, Snap's Chief Technology Officer. While continuing to work full-time as CTO and leading research and development activities in the field of generative AI, Murphy will be the main investor of the new company and will hold a significant personal stake.
In exchange for the transfer of personnel and the granting of the technology license, Snap will receive a relevant equity stake in Dotmo. The company also explained that the new entity may seek further funding from external investors in the future. This operation represents the second significant spin-off carried out by Snap in 2026. In the previous months, in fact, the company had already separated the Specs project into an independent entity focused on the development of smart glasses.
However, the launch of Specs did not generate the expected enthusiasm, partly due to concerns about the price of around $2,200. Throughout the year, Snap also made a reduction in personnel that involved cutting approximately 1,000 jobs. Unlike Specs, Dotmo will focus on activities that are not currently among Snap's main priorities.