Daniel Wiffen, I’m afraid your days are numbered. After more than 20 years in technology journalism, I decided to switch my focus to becoming an Olympic-level distance swimmer.
Now, at age 45, such a switch may seem questionable. After all, Wiffen has the youth, experience and knowledge, as well as the financial support he needs to reach his current level.
That’s before you get to talent. I, on the other hand, am overweight, have two broken ankles and one knee, can’t remember the last time I went in a pool, and don’t even know where to look for funds. Still, I’m confident that Flying Emmett Ryan will knock Whiffnator off the podium.
At least I’m more confident that’s what’s going to happen than of Allbirds becoming a successful artificial intelligence (AI) business. A failed shoe company turned around and is now likely to become a failed AI company.
Allbirds was a darling of the Silicon Valley set. The company was making wool runners that were advertised as eco-friendly, a move championed by engineers looking to demonstrate their company’s sustainable credentials.
At its peak shortly after its listing in 2021, Allbirds was valued at $4 billion (€3.4 billion). It was a unicorn with a locket strapped to its back. However, we lacked fuel in the form of sales.
Simply put, the idea of wool shoes didn’t appeal to as large a market as Allbirds and its investors had hoped. Revenues of $63 million in the third quarter of 2021 were plenty for a rising star still on the rise. The drop to just $33 million during the same period in 2025 was devastating. Losses mounted and the future became a graveyard.
By the beginning of this year, the company decided to close its last brick-and-mortar store and focus on wholesale. It was already a big change from the direct-to-consumer model it was built on. By March, even that was gone from the brand and footwear line, which was sold to brand management company American Exchange Group.
Allbirds only had shells, but they were still listed shells. The pivot, a common tactic for struggling hip-tech companies, came as a shock.
A $50 million cash injection was announced as part of the company’s transformation into AI. At one point, the company’s value jumped more than 400%, from $3 per share to more than $13, and its market capitalization rose to nearly $120 million.
There’s just one slight problem. There are several, but only one at the moment. It wasn’t entirely clear what Allbirds was actually trying to do. The AI hype machine has long since spun out of control, but it hasn’t really explained why the business took this particular turn.
The situation gets even worse. There are a number of different sub-sectors of AI that Allbirds, which plans to rebrand to NewBird AI, could potentially target. The company decided to take on perhaps the toughest, most crowded and most commercialized market.
The company plans to sell GPUs as a service, essentially providing leased access to the chips needed to power AI operations. This money was raised to gain access to these chips and the data centers in which they are located, and to resell them to other companies.
This isn’t a new idea. There are no shortage of companies already active in this field, and you’ve probably heard of some of them. These include Google, Microsoft, and Amazon Web Services (AWS).
All of this is worth trillions of dollars, which means there are four more trailing zeros on the dollar than the new version of Allbirds. If you want something a little smaller, there’s Oracle. The business has a market capitalization of just $500 billion, so Allbirds is one less zero away from making a comeback.
Of course, it’s not just the vast economic disparity that deters people from supporting Allbirds as an AI company. All of these leading companies have decades of experience in the technology field and have built in-house the knowledge needed to succeed in this aspect of AI.
They already have the customers, generally the best staff, and the partner relationships needed to crush Allbirds, even if they were evenly matched financially. Entering the AI field was a terrible idea. Entering this part of the AI sector lacks imagination and smacks of the lack of market knowledge you would expect from a direct-to-consumer shoe company, let alone a failed company.
The ability of Allbirds or NewBird AI to succeed in this market is less than their ability to beat Daniel Wiffen in pools. The signs of a dead cat bouncing are already there. As of this writing, the stock price was back to $7, giving it a market cap of $61 million.
Probably that’s for the best. I can’t even swim.
