Snapchat Spins off dotomo AI, a generative video effort to improve profit margins

\* Snap is spinning off its expensive generative AI video team into a new gaming-focused startup named Dotmo.

\* Snap will provide zero direct funding, with CTO Bobby Murphy acting as lead investor using personal capital.

\* Snap retains a large equity stake and technology licensing rights to capture future upside without the financial risk.

\* This marks Snap's second major spinoff (after Specs) alongside 1,000 layoffs to aggressively streamline operations.

\* The move immediately lowers operating expenses by removing high-cost AI talent and heavy compute liabilities from Snap's books.

\* it will immediately boost short-term profit margins