The New Zealand-founded company that once sold Silicon Valley’s favorite sneakers is now trying to sell computing power, writes Catherine McGregor in an excerpt from today’s The Bulletin.
To receive The Bulletin in full every weekday, sign up here.
From wool to silicone
A shoe company with no technology background is pivoting to artificial intelligence. Allbirds, the New Zealand-born sneaker brand co-founded in 2015 by former All White’s Tim Brown, announced yesterday that it will change its brand to NewBird AI and make a new investment of US$50 million to buy graphics processing units (GPUs), the powerful chips at the heart of the AI boom. The plan is to position the company as a “GPU-as-a-Service provider” by lending its computing power to companies struggling to access AI infrastructure.
The announcement comes just weeks after Allbirds sold its intellectual property and assets for just $39 million. This is less than 1% of the company’s peak valuation of $4 billion. As The New York Times’ Livia Albeck-Lipka reports, investors reacted with immediate enthusiasm. Allbirds’ stock price soared more than 700% on the news, rising from about $3 a share to more than $21 a share, establishing itself as the market’s new meme stock.
“Long live Mary”
The pivot prompted reactions ranging from bewilderment to alarm. “At first it looked like a really well-crafted April Fool’s joke,” AI infrastructure expert Bill Kleiman told the NYT. “Every company wants to be an AI company… The underlying business is struggling. AI presents itself as a compelling narrative reset, and we’re off.” Investment firm William Blair withdrew its coverage of Allbirds entirely, calling the plan “a hurrah at all costs” and warning of “deep uncertainty” around the GPU axis. Bloomberg TV called it “the most 2026-like move yet.” Business Insider published an article compiling the best social media jokes about this news, and unfortunately, none of them were actually funny.
Not everyone was so skeptical. New Zealand futurist Paul Spain told RNZ’s Colin Dunn that NewBird AI faces a difficult challenge given the cost of accessing the computing power of giants such as Amazon, Microsoft and Google. However, the Spain international said there were “good people at Allbirds” and that although it would not be easy, “it could work out.”
fall from grace
In February, spin-off Emma Gleeson traced the spectacular rise and fall of the Allbirds. From a 2014 Kickstarter campaign that reached its goal in five days, Allbirds has grown into a cultural phenomenon, worn by Barack Obama, Oprah Winfrey, and most recently, Chris Hipkins on this year’s Waitangi Day. At its 2021 IPO, Allbirds was valued at US$3.52 billion. However, the company never made a profit. After going public, the company aggressively expanded into brick-and-mortar stores and TV advertising, betting it could find a market beyond the Silicon Valley bubble. That couldn’t be done. Sales peaked at US$297 million in 2022, but then declined sharply. By 2024, its market capitalization had plummeted by 97% to US$4.5 million.
The company closed all of its remaining full-price stores in the U.S. earlier this year. As part of AI’s rebranding, shareholders are being asked to approve the removal from its founding documents of “all references to a company operating in the public interest of protecting the environment,” a poignant clause for a brand that until recently promised “sustainability at every step.”
Cryptocurrency Pivot
Allbirds is not the first struggling company to reinvent itself by going all-in on the year’s most hyped technology, nor is it the first with New Zealand connections. As The Register’s Matt Rosoff recalls, in December 2017, the American soft drink company changed its name from Long Island Iced Tea Co-op to Long Blockchain, despite having no background in technology or cryptocurrencies. The company’s stock price more than tripled, and the small company’s market capitalization exceeded $90 million. Of course the bubble burst. The SEC delisted Long Blockchain in February 2021 and charged three people associated with the company with insider trading. Are you one of them? Former New Zealand billionaire Eric Watson is accused of leaking non-public information about the company’s impending business transformation to a friend just before the company’s share price soared.
Garth Bray, business host for Herald NOW, spoke with Keel and said that while he was “not suggesting anything fishy” about Allbirds’ own technology focus, “it would be a hell of a comeback.” The Financial Times (paywalled) summed up the business world’s skepticism, saying: “If anyone can suggest a shoe brand suitable for the job, we advise you to run away as soon as possible.”
