The company announced that it has entered into a $50 million convertible financing agreement with an institutional investor to expand into AI computing infrastructure. The company said the transaction is expected to close in the second quarter, pending shareholder approval.
Allbirds said it will change its brand name to “NewBird AI” as part of the transition.
Allbirds said it plans to use the new funding to acquire high-performance graphics processing units (GPUs, specialized chips used to train and run AI systems) and lease that computing power to customers.
The announcement marks a surprising shift for the company that was once synonymous with Silicon Valley workwear. Founded in 2015, Allbirds built a reputation for sustainable sneakers, but has struggled in recent years with declining sales, rising costs and shrinking retail store space.
Just a few weeks ago, the company announced it would sell its brand and footwear assets to American Exchange Group for approximately $39 million, allowing the company to continue producing Allbirds products.
“The increasing development and adoption of AI is creating an unprecedented structural demand for specialized, high-performance computing that the market is struggling to meet,” the company said in an announcement.
The strategy focuses on building what it calls a “GPU-as-a-Service” business, which provides dedicated computing power to businesses that cannot be reliably accessed through traditional cloud providers.
Allbirds’ stock price soared Wednesday morning, at one point rising 600% as trading volume soared.
