Allbirds, once a trending sneaker maker in the US, is changing the way it works. Following a steady decline in the company’s stocks, it has announced that it is going to ride the AI wave, as it enters the AI computing infrastructure market. After Allbirds’ announcement, Wall Street seems to have given it a sign of approval, with shares rising by over 700 per cent.
The San Francisco-based company wrote on its investor relations page that it will be rebranding as NewBird AI with a focus on building computing infrastructure that can run AI models.
Why is a shoemaker switching to AI?
Allbirds had been struggling in the sneaker market for some time now. The company that had a valuation of $4 billion in 2022, had fallen to a market cap of just $22 million before this pivot.
A switch to AI could allow the company to capitalise on the increased demand for AI compute. Companies like OpenAI and Anthropic are looking for more computing power to meet demand for their AI models.
As per Allbirds, the company plans to acquire high-performance, low-latency AI compute hardware and offer access through long-term lease arrangements. This could bring in lucrative contracts from big AI labs for the long-term.
That is, Allbirds will buy GPUs from manufacturers like Nvidia to set up data centres, which can then be rented by companies to run AI models.
Share rises as company raises funds
AI has been the buzz in Wall Street ever since OpenAI first launched ChatGPT in 2022. At the time of writing, the Allbirds stock stood at $16.99, an increase of 583 per cent. Though it peaked at $23.13, a rise of over 700 per cent.
Allbirds has stated that it has secured $50 million in new funding to support this transition, aiming to become a GPU-as-a-Service and AI-native cloud solutions provider.
What happens to Allbird’s shoe business?
The Allbirds shoe brand is not disappearing, at least for now. The company stated that it had sold its footwear assets to American Exchange Group for $39 million. American Exchange Group is a brand management firm that includes brands such as American Exchange and Aerosol. The group plans to continue selling products under the Allbirds name.
Allbirds was founded in 2015 by ex-football player Tim Brown and renewable resources expert Joey Zwillinger. The two wanted to create a new category of shoes that relied on natural materials, not plastics and other petroleum products.
