After sale of its shoe business, Allbirds pivots to AI

After selling its shoe brand and assets for $39 million last month, Allbirds is focusing on AI. Naturally, the company is also changing its name, as the shoe brand ‘Allbirds’ was part of the sale. Introducing NewBird AI, a “fully integrated provider of GPU-as-a-Service and AI-native cloud solutions”, the company announced through its investor relations place on Wednesday.

The rebranded AI company also announced a $50 million investment from an undisclosed institutional investor in the form of a convertible financing facility.

It’s objectively pretty funny that Allbirds is becoming an AI company – not because it’s unusual for companies to pivot, but because of how extreme this pivot is. The maker of the shoes that Silicon Valley’s tech world once craved is now becoming a supplier of GPUs. It’s somewhat absurd – and risky – but you can see how the company came to this decision. After selling the assets and brand, Allbirds can keep the shell of the publicly traded company (it trades on NASDAQ under the ticker symbol “BIRD”) and then repurpose it to invest in the hot AI sector.

This is reminiscent of the time in 2017 when the Long Island Iced Tea company switched to the blockchain, sending its shares up around 275% after the rebrand. That pivot didn’t pan out, like the The NASDAQ stock exchange has delisted the stock the following year after the Bitcoin fever subsided.

Allbirds-turned-NewBird are likely hoping for a different outcome.

The company says the financing and asset sales are still subject to shareholder approval, with a meeting planned for May 18. If the sale goes through, shareholders will receive a dividend in the third quarter. The new owner of the Allbirds brand and assets, American Exchange Group, will continue to make products for Allbirds customers.

Meanwhile, NewBird AI plans to use the new funding to acquire GPU assets, which it will offer to customers looking for AI computing capacity. Over time, the company hopes to expand its service offering through partnerships and even strategic mergers and acquisitions – if the opportunity arises.