SNAP BAILS ON AI VIDEO COSTS AND SPINS THE TEAM OUT INTO A NEW STARTUP CALLED DOTMO Snap has decided that running a generative AI video operation inside a social media company costs too much, so it is cutting the team loose into its own startup. The new company is called Dotmo, and it will focus on building AI models that create interactive gaming experiences. The initial team consists of current Snap employees who are leaving the parent company to launch the venture. Snap will receive a large equity stake in Dotmo in exchange for the talent and a technology license. The unusual part of this deal is who is backing it. Bobby Murphy, Snap’s own chief technology officer, will act as lead investor and hold a significant personal stake in the new firm. Murphy will continue working full time at Snap while also being Dotmo’s primary financial backer. Snap itself is not directly funding the spinoff. This is the second major spinoff Snap has executed this year, following an earlier move to carve out its Specs smart glasses operation into a standalone company. The pattern is becoming clear. Snap is a company with nine hundred fifty million daily users and growing revenue that nonetheless cannot afford to run frontier AI research in house. The cost of staying at the cutting edge of generative video has become too high even for companies with hundreds of millions of users. The question now is how many other tech companies are quietly arriving at the same conclusion. Keywords: Snap Dotmo spinoff, Snap AI video company, generative AI costs, Bobby Murphy Dotmo