Snap, the company behind Snapchat, is cutting loose another internal team. According to TechCrunch, Snap is spinning off an internal generative AI video group into a separate company called Dotmo, with the move driven by high costs.
Dotmo will be made up of current Snap staff who are leaving the social media company to keep working on AI video development, TechCrunch reports. In other words, the people stay together and the work continues — just outside Snap's walls and on someone else's balance sheet.
Writing for TechCrunch, Lucas Ropek reports that the new company will focus on AI models for interactive gaming experiences. Techmeme, summarizing that same TechCrunch reporting, also frames Dotmo as a new company centered on AI models for interactive gaming, with cost again cited as the reason for the split.
TechCrunch notes this is "yet another" internal unit Snap has spun off, suggesting a broader pattern of the company shedding ambitious side projects rather than carrying them in-house.
The throughline here is cost. Generative AI — especially AI that produces video — is expensive to build and run, demanding heavy computing power and specialized talent. For a company like Snap, which has long faced pressure to control spending, housing a costly experimental AI video team internally is a hard sell. Spinning it out lets the work continue without Snap footing the full bill.
Why it matters: Dotmo is a small but telling example of how even well-resourced tech companies are deciding that frontier AI video is too costly to keep in-house, pushing that bet — and its expenses — into independent startups instead.