After selling its shoe brand and assets last month for $39 million, Allbirds is pivoting to AI. Of course, the company is also changing its name, since the footwear brand “Allbirds” was part of the sale. Introducing: NewBird AI, a “fully integrated GPU-as-a-Service and AI-native cloud solutions provider,” the company announced via its investor relations site on Wednesday.
The rebranded AI company also announced a $50 million investment from an undisclosed institutional investor in the form of a convertible financing facility.
It’s objectively pretty funny that Allbirds is becoming an AI company — not because it’s unusual for companies to pivot, but because of how extreme this pivot is. The maker of the shoes once craved by the Silicon Valley tech set is now going to be a provider of GPUs. It’s somewhat absurd — and risky — but you can see how the business came to this decision. After the asset and brand sale, Allbirds can keep the public company’s shell (it’s been traded on NASDAQ under the ticker symbol “BIRD”) and then reuse it to invest in the hot AI sector.
This recalls the time in 2017 when the Long Island Iced Tea company pivoted to the blockchain, prompting the stock to jump some 275% after the rebranding. That pivot didn’t pan out, as the NASDAQ stock exchange delisted the stock the following year after Bitcoin fever died down.
Allbirds-turned-NewBird is likely hoping for a different outcome.
The company says that the financing and the asset sale are still subject to stockholder approval, with a meeting planned to take place on May 18. If the sale goes through, stockholders will receive a dividend during the third quarter. The new owner of the Allbirds brand and assets, American Exchange Group, will continue to make products for Allbirds customers.
Meanwhile, NewBird AI plans to use the new financing to acquire GPU assets, which it will offer to customers seeking AI compute capacity. Over time, the company hopes to grow its service offerings through partnerships and even strategic mergers and acquisitions — if the opportunity arises.
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