Whatâs Behind Allbirdsâ Complete Pivot from Shoes to AI?
The San Francisco-based shoe brand Allbirds is jumping on the AI bandwagon, moving away from footwear assets to AI compute infrastructure. A definitive agreement was reached on Wednesday after striking a US$50m deal.
The move follows Allbirds’ prior announcement of selling the brand to fashion conglomerate American Exchange Group. This US$39m deal was announced back in March.
The latter intends to continue building on Allbirds’ legacy, shaped by high-profile customers like former US President Barack Obama, actors Ben Affleck and Leonardo DiCaprio, who have been seen wearing the shoes.
Shares peak to over 500%
To facilitate the pivot, the company plans to close during the second quarter of 2026. Following this, Allbirds will also change its name to “NewBird AI”.
The recent announcement sent the firm’s shares on a bullish high, taking it up over 580% on Wednesday. These levels were last seen in 2024, with the shares struggling of late.
However, at the time of writing, the shares seem to have come down by about 35% since the announcement yesterday. The stock market value is also more than 90% lower than when the company was first listed in 2021.
Founded in 2015 by former football player Tim Brown and clean-technology businessman Joey Zwillinger, the firm has multiple stores in the US and in other countries like the UK, New Zealand, China and Singapore. It is known for being popular in the Silicon Valley tech fashion scene.
However, Allbirds failed to capitalise on its positive start to become a leading player in the shoe market. The company’s share price had also been declining steadily since July 2025 prior to the recent rally.
According to the proxy filings made with the Securities and Exchange Commission, the upcoming conversion is subject to stockholder approval at the upcoming Special Meeting of Stockholders. This is anticipated to take place on 18 May for stockholders as per the records of 13 April.
At first, the plan for NewBird AI is to use initial capital from the company to acquire high-performance GPU assets. This will be deployed to serve customers requiring dedicated access to AI compute capacity.
The company’s long-term vision is to become a fully integrated GPU-as-a-Service and AI-native cloud solutions provider. Over time, it then intends to grow its neocloud platform by expanding its compute and service offerings.
The company aims to do this by deepening partnerships with operators and customers and evaluating strategic merger and acquisitions opportunities.
AI-driven shift
The past few years has seen companies making a rapid acceleration towards AI development. Many platforms like Duolingo and Notion have integrated a more AI-centric approach recently.
According to Allbirds’ official announcement, the rise of AI adoption has created “unprecedented structural demand for specialised, high-performance computers that the market is struggling to meet”.
It adds: “At the same time, GPU procurement lead times are increasing for high-end hardware, North American data centre vacancy rates have reached historic lows and market-wide compute capacity coming online through mid-2026 is already fully committed.
“The result is a market where enterprises, AI developers, and research organisations are unable to secure the compute resources they need to build, train and run AI at scale.”
Catching on with the ongoing trend that has taken AI compute to an all-time high, NewBird AI is being built to help close that gap between need and demand. However, it is expected to face much competition from AI companies that are racing to bring out more and more efficient models.
Dramatic pivots of this kind are not new, with many being driven by hype, where companies reinvent themselves to catch on with investor excitement and trend. In 2018, photography giant Kodak launched a cryptocurrency called KodakCoin, after which its shares surged over 200%. However, the project faded eventually and was widely criticised for getting into an unrelated sector.
Nevertheless, companies have also explored new tech narratives in the past to revive relevance in the market. One such example is social media company Meta, pivoting to Metaverse in 2021, which received massive investment, albeit with mixed investor reaction.
As AI continues being the talk of the town, whether Allbirds can fill its new shoes will only become clear over time.
