Allbirds says it’s ditching footwear and pivoting to become an AI company. Its stock just jumped 600%.

Allbirds is trading sneakers for servers, selling off its shoe brand as it strives to reinvent itself as an AI company, which has sent its shares up 600%.

The eco-friendly shoe company announced Wednesday that it is transforming itself into an AI company, which it plans to name “NewBird AI.” Allbirds said it would focus on “AI compute infrastructure,” with a long-term goal of offering a fully integrated cloud computing model. The company said it reached a $50 million deal with an institutional investor to make the move.

Allbirds, known for its minimalist wool sneakers, will sell its footwear assets to American Exchange Group, which owns more than 30 fashion, jewelry, footwear and personal care brands. Investors welcomed the move, with outsized gains reminiscent of the dot-com boom of the late 1990s, when company shares soared after announcing a shift to an online model.

Neil Saunders, retail analyst at GlobalData, said Allbirds was using the shell of the old company to generate capital and transform into a new AI-focused company.

“This is not a bad thing because it could provide a new lease of life for investors and some employees,” he told CBS News in an email. “There is demand for AI computing capacity, but it remains unclear how much expertise so-called NewBird AI has in the field and how it intends to capture market share.”

The company’s stock jumped $14.86, or 597 percent, to $17.35 in early afternoon trading.

The San Francisco-based company is entering the AI ​​race at a time when the technology is generating huge financial returns for investors. Many believe this optimism is overblown, citing fears that the market could be in dire straits. AI bubble.

Allbirds framed its pivot as a way to help fill a gap in the AI ​​market. “The rise in AI development and adoption has created unprecedented structural demand for specialized, high-performance computing that the market is struggling to meet,” the company said in its statement.