Snapchat is building 'Dreams' to turn selfies into AI fantasies

Last month, an app called Remini took over TikTok because users realized they could get professional LinkedIn headshots without paying for a real photographer.

Snapchat, however, has zero interest in helping you look like a corporate manager. Instead, it wants to drop you and your friends straight into fantasy worlds.

According to findings from app researcher Steve Moser, Snap is preparing to launch a generative AI image feature called Dreams. The tool allows users to upload selfies and generate stylized pictures of themselves in imaginative backgrounds and fantastical scenarios.

AI portraits get a social multiplayer mode

Generative selfie apps are already everywhere, but Snapchat is adding a distinctly social twist: Dreams with Friends.

Moser discovered that users will be able to give mutual permissions to generate AI images that feature both people together in the same scene.

To make the magic work, the app will instruct users to upload clear selfies without face obstructions or other people around. Submitting a mix of angles, facial expressions, and lighting will yield the cleanest results.

The feature was actually first spotted earlier this spring by reverse engineer Alessandro Paluzzi. At the time, Paluzzi noted that Dreams was given prime real estate in the app, sitting right between the Camera Roll and Stories tabs.

Snap has already dabbled in generative AI with its My AI bot, which recently gained the ability to send back Snaps instead of just plain text. When reached for comment on Dreams, Snap declined to speak on its plans.

Paywalls in the code

There is also strong evidence that Snap intends to make money from this beyond just keeping users glued to the screen.

Moser spotted references to in-app purchases for Dream Packs, suggesting users may receive a limited allotment of generations before having to pay for bundles.

Given how computationally expensive model training and image synthesis can be, charging for packs fits the playbook of indie AI avatar apps that charged five to ten dollars for prompt packs.

Why it matters

Most standalone AI portrait generators suffer from the same fatal flaw: they go viral for two weeks, users get their headshots, and then everyone cancels their subscriptions.

We think Snap's angle is clever because Dreams with Friends instantly turns an individual novelty into an interactive social loop. You aren't just generating an avatar for your own vanity; you are using it as an excuse to message a friend and collaborate inside Snap's ecosystem.

For regular users, it eliminates prompt engineering headaches and delivers instant visual fun with minimal friction.

The real risk sits in the monetization. Snap's user base skews heavily young and price-sensitive. If the hinted Dream Packs are priced too aggressively, users will simply sample the free allotment and move on, leaving the feature underutilized despite its prominent placement in the interface.