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Allbirds on Wednesday announced that the company will pivot from making sneakers to providing computing infrastructure for artificial intelligence (AI).
The San Francisco-based company said it will execute a $50 million convertible financing agreement with an institutional investor to begin acquiring graphics processing units (GPUs), which can be used to train AI models.
The company also plans to rebrand itself as “NewBird AI” and eventually shift its focus to offering cloud computing capacity and AI services, though it didn’t provide additional details on those plans.
Allbirds has closed most of its brick-and-mortar stores in recent months amid soft demand and the company’s focus on online partnerships. The company said last month that it had sold its brand and footwear assets to American Exchange Group for $39 million.
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“As a result of these transactions, the Allbirds brand and legacy will continue under the ownership of American Exchange Group for the benefit of all of its customers, investors as of the dividend record date will receive a special dividend, and investors who elect to continue to hold NewBird AI stock will be invested in a growing AI compute infrastructure business,” the company said in a press release.
NewBird AI is planning to use initial capital from the financing agreement to acquire high-performance GPUs that will be used to provide dedicated access to AI compute capacity for customers.
Over the long term, NewBird AI wants to provide GPUs as a service as well as AI-powered cloud solutions to its customers, including through the growth of its neocloud platform, while also evaluating strategic opportunities for mergers and acquisitions.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BIRD | ALLBIRDS INC | 10.91 | -6.08 | -35.79% |
Allbirds’ stock surged on Wednesday following the announcement, rising from a closing price of $2.49 a share as of Tuesday to a recent peak of $21.95 a share during Wednesday’s trading session.
The stock pared some of its gains on Thursday and is trading at around $12.30 a share, down 27.5% on the day but up 379% in the past five days. Despite that uptick, the stock is down more than 97% in the last five years.
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The company’s announcement explained the opportunity it sees in the AI space, noting that the “rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet. Global enterprise spending on AI services and data center investment are on the rise.”
“At the same time, GPU procurement lead times are increasing for high-end hardware, North American data center 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 organizations are unable to secure the compute resources they need to build, train and run AI at scale.”
“NewBird AI is being built to help close that gap. The Company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease agreements, meeting consumer demand that spot markets and hyperscalers are unable to reliably service,” it added.
Reuters contributed to this report.
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