After selling its shoe business, Allbirds shifts focus to AI

After selling its shoe brand and assets for $39 million last month, Allbirds is pivoting to AI. Of course, since shoe brand Allbirds was also participating in the sale, the company will also change its name. Introduction: NewBird AI, a “fully integrated GPU-as-a-Service and AI-native cloud solutions provider,” the company announced Wednesday via its investor relations site.

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

Allbirds is becoming an AI company, which is objectively pretty interesting. Not because it’s unusual for companies to pivot, but because this pivot is so extreme. The shoe maker once coveted by Silicon Valley tech crowds is now set to become a GPU provider. This is somewhat irrational and dangerous, but you can see how the company came to this decision. Following the sale of assets and brands, Allbirds will retain its public company shell (traded on the Nasdaq under the ticker symbol “BIRD”), which it can repurpose to invest in the hot AI sector.

This is reminiscent of 2017, when the Long Island Iced Tea Company pivoted to blockchain and its stock price soared about 275% after the rebrand. The switch didn’t work out, as the Nasdaq stock exchange delisted the stock the following year as Bitcoin fever cooled.

The Allbirds-turned-NewBird company is probably hoping for a different outcome.

The company said the financing and asset sales still require shareholder approval, and a general meeting is scheduled to be held on May 18. If the sale goes through, shareholders will receive dividends during the third quarter. American Exchange Group, the new owner of the Allbirds brand and assets, will continue to manufacture products for Allbirds customers.

Meanwhile, NewBird AI plans to use the new funding to acquire GPU assets and offer them to customers seeking AI compute power. The company hopes to expand its service offerings over time through partnerships and strategic mergers and acquisitions as opportunities arise.