Allbirds goes soleless and pivots to AI

In this modern era where seemingly every tech company is defined by its relationship with AI (or lack thereof), Allbirds has achieved perhaps the most 180-degree corporate pivot we’ve ever seen.

In case you didn’t know, Allbirds was a direct-to-consumer company that made wool sneakers popular among Silicon Valley types in the 2010s. Take note of the past, because the company announced in a release this week that it was abandoning the shoe business altogether and becoming an AI company.

An unspecified investor agreed to contribute $50 million to fund the brand’s pivot to AI computing infrastructure; the money will be spent on data center technology rather than shoe production.

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Allbirds also changed its name to NewBird AI. In a company statement, the company proclaimed that this would help make it easier for customers to access AI hardware.

“The rise in AI development and adoption has created an unprecedented structural demand for specialized, high-performance computing that the market is struggling to meet… The result is a market in which companies, AI developers, and research organizations are unable to obtain the computing resources they need to create, train, and run AI at scale.

NewBird AI is being built to help bridge this gap. The company will initially seek to acquire high-performance, low-latency AI computing hardware and provide access under long-term lease agreements, meeting customer demand that spot markets and hyperscalers are unable to reliably meet.

Not long ago, Allbirds was booming and after an IPO in 2021, the company reached a peak valuation of over $4 billion. Amid the tech startup boom of the past 15 years, merino wool Allbirds sneakers were a common sight in tech offices across the Bay Area. However, it’s been a tough five years for the brand, and after failing to find a wider market, it was sold for pennies on the dollar to a brand management company in March, according to the New York Times.

For what it’s worth, NewBird AI stock rose 600% after the announcement, according to Times.

Still, it’s highly unusual to see a clothing company completely abandon the clothing portion of its business in favor of purchasing GPUs to rent to its customers. Many companies, large and small, have turned to AI in one way or another in recent years, with varying degrees of success.

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