Struggling shoe brands allbirdsThe company, known for its signature “wool runner” sneakers, has announced it will pivot to its AI computing business rather than shutting down.
This surprise announcement followed the sale of brand assets, including intellectual property and certain other assets and liabilities. Donated $39m (£31m) to brand management company American Exchange Group Early this month.
As part of the deal, which still required shareholder approval at the time, Allbirds was to be dissolved and cease operations. Instead, the company has now announced that it has raised $50m (£37m) in funding to transform itself into an AI company.
That means the Allbirds brand will likely continue producing shoes under new ownership, but the namesake corporation will turn its back on the fashion industry entirely. Under its new name, NewBird AI, the company positions itself as a technology company and capitalizes on the current AI market boom.
Allbirds explains that its rather bizarre reinvention is a response to the rise of AI development and adoption in global markets. As enterprise spending on AI services increases, the company says it sees a gap in the market for specialized high-performance computing services, especially as demand for data storage and processing exceeds current supply.
The company plans to use the initial funding from the new funding round to acquire high-performance graphics processing unit (GPU) assets, chips that power AI workloads, to companies looking to build AI tools with on-demand computing power and cloud services.
The company’s long-term vision is to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider, and it plans to explore strategic merger and acquisition (M&A) opportunities at some point in the future.
As a shoe company, Allbirds was struggling. In its latest financial report for Q3 2025, its net revenue was $33m (£25m), down 23.3% year-on-year, and its profit margins also fell.
Allbirds attributes the expected results to internal structural changes as part of its turnaround strategy to support profitable growth. Vernacchio added at the time that the company was “taking decisive steps to further reduce costs, increase liquidity and pursue value creation opportunities.”
Since going public in 2021, the stock price has fallen 99%, and even with this announcement, it has not fully recovered. Its current value is about 90% lower than its original IPO.
