GoKawiilThe shoe company Allbirds, famous for its wool trainers, is pivoting to AI . You read that right. The San Francisco company has plans "to pivot its business to AI compute infrastructure, with a long-term vision to become a fully integrated GPU-as-a-Service and AI-native cloud solutions provider." It's also changing its name to NewBird AI.
This is subject to shareholder approval, with a vote scheduled for May 18. Once approved, the company will raise $50 million from an unnamed investor to assist with this enterprise. This money will be used for the "acquisition and monetization of graphics processing units, related high-performance computing infrastructure capable to support high workloads and other related assets." In other words, all of the things one would need to start an AI compute company.
Allbirds has always been known as an eco-friendly shoe company and, well, there's no real way to do AI while protecting the environment . The company plans on getting rid of any eco-friendly branding, with stockholders being asked to approve a charter amendment proposal to "remove references to the company being operated for the environmental conservation public benefit."
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Investors absolutely love AI, despite rising public sentiment against the technology . To that end, the announcement that Allbirds was transitioning from shoes, a product category it has a decade of experience in, to AI compute, a product category it has no experience in, shot the stock up by over 400 percent. Financial Times has suggested this uptick will be short-lived and that retail investors should stay away.
This pivot to AI cloud compute is surprising and, frankly, bizarre, but something drastic was bound to happen to Allbirds at some point. The shoe company was once riding high, with a valuation of around $4 billion as recently as 2021. It sold its shoe business and branding to an investment firm earlier this month for just $39 million .