Luxury shoe brand Allbirds turns into an AI business

In a surprising turn of events, a sneaker company that once struggled to make its shoes more environmentally friendly announced today that it has transformed into an artificial intelligence company.

The San Francisco-based company, which was once valued at $4 billion, said it was abandoning footwear altogether and “re-pivoting” to “AI computing infrastructure” and now has a “long-term vision to become a fully integrated GPU-as-a-Service and AI-native cloud solutions provider.” The company will now be known as NewBird AI.

The move still requires board approval, with a vote scheduled for May 18. If approved, the company said it would raise $50 million, but did not say who would invest. The funds will be used to “acquire and monetize graphics processing units, associated high-performance computing infrastructure capable of supporting high loads, and other related assets.”

Despite how easy it seems to become an AI company, industry insiders seem a bit perplexed by this move. “Their pervasiveness and proliferation has created an unprecedented structural demand for specialized high-performance computing, which the market is struggling to meet,” the company explained in a press release. “NewBird AI is built to fill that gap.”

Changing consumer patterns have not been good for the company, formerly known as Allbirds. A few weeks ago, the company sold its footwear assets to fashion company American Exchange Group for just $39 million. It was a phoenix-like fall for a company that once made headlines in Hollywood, Silicon Valley, and world politics.

This high-flying bird has plummeted from there, going from a multibillion-dollar valuation to what some commentators have dubbed a “dead parrot.” Although recent changes have boosted the stock price considerably, the company is still living in the shadow of its past glory, with a current market value of nearly $150 million.

It remains to be seen whether adding the word “artificial intelligence” to a company’s name means that anyone can do it today.

“Some of these changes are practical and strategic,” AI infrastructure expert Bill Kleiman told The Associated Press. “Some people find it more reactive. It’s fair to say it can come across as a bit desperate in this case. The underlying business is struggling, and AI presents a compelling narrative reset.”

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