Shoe brand pivots to AI, stock soars 600%
What's the story
Allbirds, the sustainable footwear brand known for its popular Wool Runners, has announced a major shift in its business model. The company, which went public at a $3 billion valuation in 2021 but never turned a profit, is now venturing into artificial intelligence (AI) and cloud computing. Following the announcement, Allbirds shares skyrocketed on Wednesday, jumping from $2.49 to an intraday high of $24.31. The stock closed at $16.99, ending the day up 582%.
Financial woes
From shoes to servers
Allbirds has struggled financially. The company never turned a profit after its IPO in 2021 and saw sales plummet by nearly 50% from 2022 to 2025. Now, it plans to sell its name and footwear assets for $39 million to American Exchange after closing remaining stores. The company has announced a plan to raise $50 million from an unnamed investor for its new venture, NewBird AI.
Market strategy
Transforming into a tech player
NewBird AI intends to use the initial capital from this investment to purchase high-performance GPU assets. These will be used to meet customer demand for dedicated access to AI compute capacity. The company's long-term vision is to become a fully integrated GPUaaS and AI-native cloud solutions provider, expanding its neocloud platform over time by growing compute and service offerings, deepening partnerships with operators and customers, and exploring strategic M&A opportunities.
Market gap
Addressing the AI compute demand gap
The rise of AI has created a huge demand for specialized, high-performance compute that the market is struggling to meet. NewBird AI will initially look to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements. This way, it hopes to meet customer demand that spot markets and hyperscalers are unable to reliably service.