Shoe Brand Allbirds Announces Pivot to AI; Stock Rises Almost 600 Percent

Allbirds, following the sale of its assets and shoe brand, announced on April 15 that it is pivoting to artificial intelligence (AI) and will receive $50 million in a convertible financing facility. Allbirds will change its name to “NewBird AI.”

“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet. … Enterprises, AI developers, and research organizations are unable to secure the compute resources they need to build, train, and run AI at scale,” Allbirds said in its press release. “NewBird AI is being built to help close that gap.”

Its stock rose around 582 percent on April 15, rising from $2.49 to $16.99; 288 million shares were exchanged. On April 16, its stock fell almost 36 percent to $10.91.

The facility, funded by an unnamed investor and awaiting stockholder approval on May 18, is expected to close in the second quarter.

The company said the initial capital will be used to buy GPUs, or AI chips, that it will lease under long-term agreements, with a long-term vision of becoming a fully integrated GPU-as-a-service and AI-native cloud solutions provider.

Allbirds said it will grow its AI compute cloud platform by expanding its compute and service offerings, deepening partnerships, and considering strategic mergers and acquisitions opportunities.

This drastic change in its business from footwear to AI follows the San Francisco-based company selling its brand and certain assets for $39 million on March 30.

The sale fell far short of the $4 billion valuation the company, founded in 2015, had in 2021 when it raised more than $300 million in its initial public offering. Its stock price opened around $532.

The buyer, American Exchange Group, also owns other consumer brands, such as American Exchange, Aerosoles, Jonathan Alder, and White Mountain.

“We are incredibly thankful to our teams for the work they have been doing to fuel our product engine, build awareness of Allbirds and deliver an engaging customer experience,” Joe Vernachio, CEO of Allbirds, said. “This next chapter with AXNY builds on the foundational work already completed and sets up the brand to thrive in the years ahead.”