Allbirds executed a complete business transformation Wednesday, abandoning its sustainable footwear operations to become an AI infrastructure provider. The company secured $50 million in convertible financing and will rebrand as NewBird AI.
Shares exploded over 550% in early trading as investors embraced the radical pivot. The San Francisco-based company, which debuted on Nasdaq in 2021 at a $3 billion valuation, had lost 99% of its market value before the announcement.
The transformation involves selling all footwear assets and brand rights to American Exchange Group for $39 million. That buyer will continue operating the Allbirds shoe business while the publicly traded entity pursues AI opportunities.
NewBird AI plans to use the financing proceeds to acquire high-performance graphics processing units. These GPUs will power dedicated AI compute capacity offered to customers under long-term lease arrangements.
It looks like an attempt to capitalize on the AI movement. I don't see how Allbirds brings anything to the table beyond name recognition
Bruce Winder, independent retail consultant — Economic Times Tech
The company targets the GPU-as-a-Service market, positioning itself as a provider of AI-native cloud solutions. Management cited unprecedented structural demand for AI compute resources driven by rising enterprise spending and lengthening hardware procurement times.
Allbirds had been closing brick-and-mortar stores in recent months due to weak demand and shifting to online partnerships. The footwear business struggled with inventory management and supply chain challenges that weighed on profitability.
The pivot mirrors previous corporate reinventions during technology booms. Long Island Iced Tea Corp famously rebranded as Long Blockchain in 2017 to capitalize on cryptocurrency enthusiasm before eventually collapsing.
Investment bank Chardan is acting as placement agent for the convertible financing, which requires shareholder approval at a special meeting scheduled for May 18. The transaction is expected to close in the second quarter.
Upon completion, Allbirds plans to issue a special dividend to shareholders on May 20. This effectively separates the legacy footwear operations from the listed entity pursuing AI infrastructure opportunities.
The stock closed at $13.33, valuing the company at $116 million. Allbirds ranked among the most active orders on Fidelity's trading platform, signaling strong retail investor interest in the transformation.