Allbirds is not only pivoting to AI, but also moving away from its core environmental principles.
Allbirds, once dubbed Silicon Valley’s go-to shoe maker, announced Wednesday that it is transitioning from footwear to AI computing infrastructure and becoming NewBird AI.
The company said it plans to buy GPUs, or powerful chips, and become a GPU-as-a-service company. The company is also selling its footwear assets and its original name, meaning Allbirds-branded shoes may continue to be manufactured under new ownership.
In a filing with the Securities and Exchange Commission, the company partially answered a question about what that means for Allbirds’ status as a company committed to ESG (environmental, social, and governance principles).
Shareholders will vote next month on proposed changes to the company, including removing environmental commitments from its articles of incorporation and revoking its status as a public benefit corporation, according to the filing. PBC is a commercial corporation whose purpose is to generate public benefits and operate responsibly and sustainably.
The company stated, “The anticipated electronics infrastructure business will not place much emphasis on the public interest of environmental conservation.”
Allbirds said in its filing that there are risks to some of the proposed charter changes, including ceasing to operate as a Delaware PBC that would require the company to “generate public benefits and operate in a responsible and sustainable manner.”
“Eliminating the position could harm our reputation, adversely affect our ability to attract and retain customers, employees and partners, and adversely affect our business, financial condition and results of operations,” the filing states.
The company said that if the amended articles of incorporation are accepted, it will be “operated in the best interests of shareholders without balancing the best interests of shareholders with the public interest of preserving the environment.”
Allbirds did not respond to Business Insider’s request for comment.
The transition to AI is a particularly notable move for Allbirds, given concerns about AI’s environmental impact and resource consumption. A Business Insider investigation found that the boom in AI and data centers is straining power grids and water supplies across the United States.
Allbirds was founded as a sustainable shoe company
When Allbirds started in 2015, sustainability was front and center. The company promoted that shoes made from natural and sustainable materials are better for people and the environment.
In 2016, the company achieved B Corp certification, which is given to companies that meet certain standards regarding social and environmental impact. It also became a PBC.
When Allbirds went public in 2021, the company said in an SEC filing that its mission was “to create better things in a better way through nature: products that make people feel good and feel good.”
“We aim to reverse climate change through better business by empowering people to make better, more conscious decisions for themselves and the planet,” the company said, adding, “We are proud to be able to harmonize the economic and environmental benefits of our work and serve as a powerhouse for a new era of sustainable enterprise.”
Last year, the company announced that it had created “the world’s first net-zero carbon shoe” with the limited edition M0.0NSHOT Zero, which is made from “carbon negative recycled wool” from New Zealand.
The company’s critics have accused the company of greenwashing, saying its claims to have a positive impact on the environment are more marketing than reality.
Allbirds said in its latest SEC filing that it will not focus much on environmental protection, but it is unclear whether its environmental principles will remain part of the company in any way.
For now, this transition may be good for shareholders, if not for the business.
Allbirds stock was up 582% at market close on Wednesday, reversing a year-long slump.