Snap’s Divisive AI Feature Follows a History of Shelved Tech Bets

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Snap’s Divisive AI Feature Follows a History of Shelved Tech Bets
Evan Xie

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Snap Inc.’s new My AI feature that lets users chat with an AI powered by OpenAI’s ChatGPT technology is gaining steam. After initially releasing the feature to some three million paid Snapchat+ subscribers, the Santa Monica-based social tech company decided to open it to all its users for free last week.


While it’s a bit early to tell how many people are actually using the AI chatbot for texting and images, Snap CEO Evan Spiegel implied at Snap’s partner summit last week that it’s accelerated demand for the $3.99 monthly service. Spiegel told Time, “we definitely saw some nice momentum with My AI.”

Snap spokesperson Liz Markman told dot.LA, “as we’ve been rolling out My AI, the vast majority of people with early access have been enjoying playing with it — sending millions of chat messages per day to learn more about movies, sports, pets, and the world around them.” Markman added that Snap plans to use preliminary feedback on My AI to “continue improving” the feature and noted that, “as with all AI chatbots, My AI can occasionally give inaccurate responses - including those that sound plausible but are impossible or unrelated to the given context.”

But not everyone is thrilled about My AI. This week the Snapchat app got a slew of one-star reviews since the My AI launch, with many users annoyed that the AI showed up in their chat tab unannounced and couldn’t be blocked or removed without paying for Snapchat+ to hide it.

That said, the early traction to My AI, and by extension the Snapchat+ subscription, is clearly encouraging to Spiegel. And for a company that’s still not profitable, having a new tool that’s going to drive people to the app and boost user count is key.

But in the past, Spiegel and Snap’s bets on technology haven’t always panned out. Let’s take a look at some of the company’s other ventures prior to My AI, and how they fared.

Apps and Games

Snap first got into gaming in April 2019 with Snap Games, and really accelerated its gaming programming during the coronavirus pandemic, with the goal of attracting more users to the app. The plan was to turn Snapchat into a mobile gaming powerhouse; both producing its own games and acting as a publisher for other studios’ content.

Initially, there was quite a demand for Snap’s games. In June 2020 the company said it had 100 million players since its launch.

But by February 2023, Snap abruptly shut down its gaming division in a cost-cutting bid. The company said in response to a disgruntled user’s tweet two months ago, “we'll be bringing more focus to other Snapchat products and features that will be beneficial to creators and content viewers.”

Pixy

The camera drone was announced last April and was supposed to be a compact flying device that can take off and land from a user’s hand. While in the air, it could film footage and transmit it back to the Snapchat app to share. Snap underestimated demand for Pixy, however, which led to months-long shipping delays.

At the time, drone footage was all the rage and Snap wanted to prove it could develop a reliable flying craft that could entertain camera enthusiasts while also showing off its technical prowess. But within four months it was shelved, with Spiegel telling staff in August 2022 to stop development.

The Wall Street Journal, which first reported on the cancellation, said Snap will continue to sell the existing iterations of Pixy for $230, but won’t make any new ones. Though it’s possible down the line Spiegel will revive the drone: He told The Verge last year, “maybe we would make more with version two if people love the original product.”

Spectacles

First introduced in 2016, Snap’s camera glasses were designed to be augmented reality shades that can capture photos and videos of augmented reality interactions around you and beam it back to the Snapchat app. Spiegel hoped that AR specs would be the fashion of the future, but they still haven’t hit the mainstream.

The glasses are still sold today – the Spectacles 3 that launched in 2019 retails for $380. But the fourth generation of the product, announced in May 2021, still isn’t available to consumers. Instead, as the Verge reported, the augmented reality glasses are being given to an uncertain number of creators who applied for access online.

Snap Lab, the division of the company making Spectacles, is quite secretive about their progress. What we do know is the people allowed to use the current-gen Spectacles have created some pretty cool stuff, including a virtual Super Mario Bros. course. According to Markman, Snap is still “fully committed to Spectacles and [are] narrowing our investment scope to focus on highly differentiated long-term research and development efforts.”

Original Content

Snap was previously heavily invested in creating original content, and at one point the company said one of its most popular shows, “The Dead Girls Detective Agency,” had 20 million unique viewers on the app.

The company created a number of shows to be watched on the Snapchat app, but by August 2022 Spiegel said Snap would stop production in a bid to pare back spending. At the time, the company announced it would cut 20% of its workforce, many of whom were on the content teams. Snap estimated that it would save $50 million annually in fixed content costs by axing Snap Originals. Snap hasn’t produced any original content since March 2022. - Samson Amore.

Editorial disclosure: Snap is an investor in dot.LA.

Editor’s note: This newsletter has been updated with comments from Snap.

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Big Wins: Dodgers Take the Title ⚾, ChatGPT Levels Up🚀

🔦 Spotlight

Happy Friday, LA! It’s been a week of big wins, on and off the field. 🎉

⚾️ First up, let’s talk Dodgers. With a thrilling 7-6 comeback victory over the Yankees in Game 5, the Dodgers clinched their eighth World Series title, their first since 2020. The city is buzzing, and fans are ready to celebrate! A parade kicks off this morning at 11 a.m., starting at City Hall and winding down to Flower Street, with a ticketed celebration at Dodger Stadium for those wanting to keep the festivities going.

Image Source: Dodgers

💻 Meanwhile, in the tech, OpenAI just rolled out a game-changing update for ChatGPT. Plus and Enterprise users can now access real-time internet search, powered by Microsoft Bing, bringing ChatGPT's responses fully up-to-date. This means users can now ask about the latest news, hotspots, or recent LA startup announcements, and ChatGPT will pull in fresh, relevant answers directly from the web. Previously limited to information up to 2021, ChatGPT’s new browsing capabilities make it a valuable digital assistant for anyone needing real-time insights in fast-paced industries like tech and entertainment.

Image Source: ChatGPT

🔍 The real-time search feature also includes “Browse with Bing,” allowing ChatGPT to source information from multiple sites for detailed answers to complex questions. Whether you’re exploring the latest venture capital trends in LA or curious about the best local spots, ChatGPT’s new browsing power helps you stay ahead with the latest info. This leap forward in AI functionality makes ChatGPT even more versatile and powerful for everyone, from business owners to everyday users.

From the Dodgers’ World Series win to OpenAI’s latest ChatGPT update, there’s a lot to celebrate in LA this week. Here’s to champions, innovation, and a city that’s always pushing boundaries. 🌆✨


🤝 Venture Deals

LA Companies

  • Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks, has raised a $3M Seed funding round led by Science Inc. to expand its product offerings and operational capabilities. - learn more
LA Venture Funds
  • Smash Capital led a $50M Series B round for Read AI, a productivity-focused AI company, bringing its total funding to $81M. The company offers a platform that enhances meeting efficiency through features like note-taking, summarization, and transcription. Additionally, Read AI introduced "Read AI for Gmail," a free Chrome extension that integrates information from various applications, reducing the need to switch between apps. The funds will be used to increase the company's headcount in engineering, data science, and business teams. - learn more
  • Distributed Global participated in a $25M funding round for Nillion, a company that provides decentralized privacy solutions designed to secure sensitive data using advanced technologies like secure multi-party computation. - learn more
  • Act One Ventures participated in a $5M Seed funding round for Latii, a construction materials supply chain startup, to enhance its platform that connects contractors with suppliers, aiming to streamline procurement processes and reduce costs in the construction industry. - learn more
  • SmartGateVC participated in a pre-seed funding round for Ritual Dental, a company revolutionizing dental care by integrating advanced technology and microbiome science to provide personalized, preventive treatments. - learn more

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      Billion-Dollar Milestones and Snapchat’s New Features

      🔦 Spotlight

      Happy Friday Los Angeles!

      This week’s spotlight showcases LA’s thriving tech scene, featuring Snapchat’s latest feature updates and two local startups Liquid Death and Altruist, making TechCrunch’s Unicorn List for 2024.

      Image Source: Snap

      Snapchat’s recent fall updates bring fresh features, including a new iPhone camera shortcut for instant snaps, Halloween-inspired AI-powered Lenses, and Bitmoji costumes inspired by Mean Girls and Yellowstone. Bitmoji stickers now reflect trending Gen-Z expressions like “slay” and heart symbols for added flair in chats. Plus, the “Footsteps” feature on Snap Map allows users to track their past adventures privately, adding a nostalgic touch.

      Image Source: Liquid Death

      ICYMI, two LA startups joined the Unicorn Club—achieving valuations over $1 billion. Liquid Death, based in Santa Monica, is a canned water company with edgy branding and a humorous sustainability focus. Known for viral marketing and brand partnerships, it redefines bottled water as a lifestyle brand and environmental statement. In March, Liquid Death closed $67 million in strategic financing, raising its total funding to over $267 million and valuing it at $1.4 billion.

      Image Source: Altruist

      Altruist, a Culver City-based fintech platform, offers financial advisors streamlined tools to better serve their clients. With a user-friendly investment and account management platform, Altruist has gained strong traction in the finance world. In May, it announced a $169 million Series E funding round, bringing its total funding to over $449 million and earning a valuation of $1.5 billion.

      Together, Liquid Death and Altruist exemplify LA’s capacity for innovation across diverse sectors, from lifestyle branding to fintech. Whether reshaping financial tools or redefining sustainable branding, these companies showcase LA’s unique entrepreneurial spirit. Go LA!

      Check out TechCrunch’s 2024 Unicorn List here. And don’t miss Snapchat’s latest features—perfect for adding some fun, connection and maybe a few selfies this weekend!


      🤝 Venture Deals

      LA Companies

      • Freeform, a company bringing AI to metal 3D printing, raised $14M in funding from NVIDIA’s NVentures and AE Ventures to further develop its AI-powered 3D printing technology for industrial-scale production. - learn more
      LA Venture Funds
      • Anthos Capital participated in a $70M Series D round for Carbon Robotics, which develops AI-powered robotics for precision agriculture, and the funding will be used to accelerate the growth of its autonomous weeding technology. - learn more
      • Anthos Capital participated in a $3.5M seed round for Plasma Network, aimed at expanding access to USDT stablecoins on the Bitcoin network, with the investment supporting the network’s growth and efforts to enhance stablecoin accessibility through the Lightning Network. - learn more

      LA Exits


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          ⚖️FTC’s "Click to Cancel" Rule and Its Ripple Effect on Tech

          🔦 Spotlight

          Happy Friday Los Angeles,

          The FTC’s new “Click to Cancel” rule is shaking up subscription-based tech. Now, instead of navigating a maze of cancellation hurdles, users can cancel subscriptions as easily as they signed up—with a single click. This shift is a wake-up call for SaaS, streaming, and app-based companies, where once-hidden exit options often kept users around simply because canceling was a hassle.

          The rule also requires businesses to send regular renewal reminders, ensuring customers stay informed about upcoming charges. It's more than a cancellation button—it’s about transparency and giving users control over their decisions.

          For startups, the impact goes deeper than UX adjustments. Many have relied on "dark patterns," which subtly discourage cancellations by hiding the exit. Now, companies must shift toward building genuine loyalty by delivering real value, not by complicating exits.

          While this might affect retention rates initially, it could lead to more sustainable business models that rely on satisfaction-driven loyalty. Investors may start prioritizing companies that emphasize transparent, long-term engagement over those that depend on dark patterns to maintain retention metrics.

          The rule opens the door to more ethical UX design and a truly user-centered approach across the tech industry. It may even set a precedent against manipulative design in other areas, such as privacy settings or payment methods.

          Ultimately, the “Click to Cancel” rule presents an opportunity for the tech industry to foster trust and build stronger customer relationships. Startups and established companies that embrace transparency will likely stand out as leaders in a new era of customer-centric tech, where trust—not tricky design—is what retains users.

          As the tech landscape continues to evolve, LA Tech Week 2024 offers a chance to explore these shifts in real-time. Check out the upcoming event lineups to stay informed and make the most of your time:

          For updates or more event information, visit the official Tech Week calendar.


          🤝 Venture Deals

          LA Companies

          • Ghost, a company supporting top brands and retailers with streamlined logistics and fulfillment solutions, raised a $40M Series C funding round led by L Catterton to fuel its continued growth and innovation. - learn more

          LA Venture Funds
          • Assembly Ventures participated in a $27M Series A round for Monogoto, a provider of software-defined connectivity solutions that enable secure, cloud-based IoT and cellular network management on a global scale. - learn more
          • Angeleno Group participated in a $32M Series C round for REsurety, a company that recently launched an innovative clean energy marketplace aimed at providing better financial and operational insights to support renewable energy transactions. - learn more

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