Snap has spun off an internal generative AI video team into its own company, titled Dotmo. The move aims to focus on developing AI models for interactive gaming experiences and will retain close ties with Snap.

Dotmo will use technology licensed from Snap, with initial staff coming from the parent company. Despite not receiving direct funding, Bobby Murphy, CTO of Snap, will invest significantly in Dotmo while remaining with Snap full-time.

This spinoff marks a different approach to previous ventures; Specs was focused on smart glasses, whereas Dotmo aims for digital experiences that aren't core to Snap's business priorities. It could still become an ally if the fit is right.

The move is seen as cost-saving, yet Snap retains a significant stake in Dotmo, ensuring potential future rewards. This isn't without precedent; earlier this year, Snap laid off 1,000 employees and spun off Specs into its own venture for smart glasses development.