Snap is turning an internal generative AI video team into a separate company called Dotmo, which will build interactive gaming experiences, according to a TechCrunch report. The social media firm cited the high costs of developing such technology in-house as a reason for the move.

Dotmo will be staffed by current Snap employees leaving to launch the venture, and Snap will grant the start-up a licence to adapt its technology for gaming and interactive entertainment, states TechCrunch. While Snap will not fund Dotmo directly, chief technology officer Bobby Murphy will serve as lead investor and hold a significant personal stake, though he will remain in his full-time role at Snap overseeing AI research. In return for the talent and the technology licence, Snap will receive a substantial equity position in the new company, as per the report. Dotmo may also seek outside funding later.

According to TechCrunch, the spin-off is Snap’s second major restructuring this year, following the separation of its Specs smart glasses unit into an independent entity. Earlier in 2026, Snap also cut around 1,000 jobs. A Snap representative told TechCrunch that Dotmo is focused on digital experiences outside the company’s core business, though it could become a partner in the future.