Allbirds said it will pivot from making shoes to developing artificial intelligence infrastructure and will operate under a new name, NewBird AI.
The company said an unnamed investor had agreed to spend $50 million to finance the shift, money the firm plans to use to buy graphics processing units, known as GPUs, for high performance compute.
Allbirds said it had agreed to sell all its assets last month for less than 1 percent of its previous $4 billion valuation, and that the company sold its business to a brand management company for $39 million.
The company, which is based in San Francisco and went public in 2021, said developers and research groups are struggling to secure compute resources to build, train and run A.I. at scale.
The company said, quote, "The rise of A.I. development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet," and added NewBird AI is being built to help close that gap.
Market Reaction And Industry Context
Markets reacted sharply, with the company’s stock rising nearly 600 percent to close at $16.99 after the announcement, up from trading at less than $3 just days earlier, as reported by the source.
The article noted that investors have flocked to A.I. stocks for more than a year, and that several companies in recent years have pivoted in an attempt to capitalize on a data-center construction boom tied to the fast-growing A.I. industry.
Company statements framed the pivot as a response to structural shortages in high-performance compute, and emphasized building capacity to serve developers and research groups that need GPUs and other resources.
The move replaces Allbirds’ identity as a maker of Merino wool sneakers that once symbolized a venture capital boom, with a business focused on supplying compute for A.I. development, according to the reporting.
