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Shares of Allbirds, the 2010s pioneer of trendy sneakers and eco-friendly millennial marketing, soared in an almost comical fashion Wednesday morning after the company announced an extreme 2026 change of direction, abandoning environmental concerns and getting into the AI business.
The stock, which had been stagnant since its listing in November 2021, soared more than 600% on Wednesday. The stock closed at $14.50, up 582% from Tuesday’s closing price.
The impetus was Allbirds’ announcement that the company, once valued at $4 billion, would soon re-emerge as a new company focused on “AI computing infrastructure.”
Translation: You’re essentially buying computing power and renting it out to tech startups.
The move comes just weeks after Allbirds sold its footwear assets and brand to American Exchange Group, which specializes in selling licensed fashion accessories bearing existing well-known brand names, for just $39 million.
Allbirds, which will be renamed “NewBird AI,” announced it has signed a $50 million deal with an unnamed institutional investor to acquire “high-performance GPU assets” to begin its transition to “fully integrated GPU-as-a-Service.”
But despite the stock’s meteoric rise, Allbirds remains a shadow of its former self, with a market capitalization of just under $150 million as of Wednesday’s closing bell.
It’s worth emphasizing that this sneaker-to-AI shift is not part of the company’s standard strategy, and its novelty may have fueled investors’ initial enthusiasm.
But this change is notable for another reason. Allbirds’ discreet, “sustainable” wool-based shoes launched in 2016 and quickly became a Silicon Valley wardrobe staple. It was perhaps the peak of retail’s lowercase L liberal do-gooder era, when marketers convinced upwardly mobile office workers that all they had to do was shop their way to a low-carbon, zero-waste future they believed was within reach.
Allbirds were more than sneakers. They were political statements, alerting fellow coastal millennial techno-optimists to the wearer’s position. Now, the go-to accessory for engineers has become the technology itself. And technology itself is just an abstract promise. Computing powers AI products It’s not exactly profitable yet.
However, this does not mean that the new brand “Newbird AI” will become obsolete. But it shows that Silicon Valley, and Wall Street, is willing to reward companies that type the word “artificial intelligence” into their pitch materials.
Underscoring how much has changed since Allbirds’ heyday, the new company will also abandon basic commitments to environmental conservation.
The company, which once touted “sustainability at every step,” was established as a Certified B Corporation, a for-profit company with higher-than-normal standards for social and environmental impact. But because the company’s new operations are notoriously energy-intensive processes, the company plans to ask shareholders next month to approve an amendment to its charter to remove “references to a company operating in the public interest of preserving the environment,” according to a regulatory filing.
Admittedly, Allbirds’ footwear business hasn’t been going well lately.
The company grew rapidly but stumbled, opening dozens of stores on multiple continents but failing to move enough inventory to turn a profit.
“Allbirds has gone from a high flyer to a dead parrot,” GlobalData analyst Neil Saunders said in a note last month as Allbirds was nearing a deal with American Exchange.
Sanders wrote that the lack of traction is because Allbirds’ sustainability pitch “has not been a key consideration for most footwear consumers,” who value style, price and comfort more.
In the immortal words of Monty Python, this bird is no more.
Allbirds isn’t the first company to do a full 180 to keep up with new technology. It is also not uncommon for such pivots to signal irrational exuberance in the market.
Take Long Island Iced Tea Co., a former soft drink maker, for example. The company took advantage of the 2017 cryptocurrency boom by rebranding as a blockchain technology company and changing its name to “Long Blockchain.” The initial pivot sent the stock up 380%, but it didn’t work out in the long run. The Securities and Exchange Commission charged three people with insider trading, but the company did not become an operator of the blockchain technology and its stock was delisted in 2021. (The SEC ultimately settled with two of them, and the case against a third is ongoing.)
And as the tides in cryptocurrencies have turned, some Bitcoin mining companies have restructured themselves to focus on AI infrastructure instead.
But the market’s extreme reaction to Allbirds’ move may be unprecedented.
“The motivation for the pivot is reasonable, but the market reaction has been less so,” said Steve Sosnick, chief strategist at Interactive Brokers. “To see a 6x or 7x move for a company that is literally abandoning its traditional business model and moving to one without proven expertise says a lot about the frothyness of the market and the appetite of investors to follow the moves.”
