After agreeing last month to sell all of its assets for less than 1% of its former $4 billion valuation, footwear company Allbirds announced Wednesday that it will “pivot its business” to artificial intelligence.
The company, once the maker of Silicon Valley’s favorite sneaker (a Merino wool sneaker that became a symbol of the 2010s venture capital boom), went public in 2021. Five years later, after struggling to gain a broad customer base and turn a profit, Allbirds sold its business to a brand management company for $39 million.
In a statement, the San Francisco-based company said an unnamed investor has agreed to shell out $50 million to fund a shift to AI infrastructure. That money, the company said, will be used to buy graphics processing units, known as GPUs — powerful chips that can perform calculations and analyze enormous amounts of data. (This figure is a drop in the bucket in an industry where spending is measured in tens of billions and even trillions.)
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The business, which will no longer be tennis, will also have a new name: NewBird AI.
“The growth of AI development and adoption has created unprecedented structural demand for specialized, high-performance computing that the market is struggling to meet,” the company said. She added that developers and research groups were struggling to secure the resources needed to build, train and operate AI at scale.
“NewBird AI is being built to help close this gap,” the company said.
On Wednesday, the company’s shares rose almost 600%, closing at US$16.99. A few days ago, the stock was trading at less than US$3. For more than a year, investors have been flocking to AI-linked stocks, boosting their prices.
Founded in 2015 by a New Zealand soccer star and a cleantech entrepreneur, Allbirds used wool and castor oil to make its shoes, promoting them as sustainable, minimalist pieces. They quickly became a staple of office wear in the technology sector, filling the wardrobes of Bay Area executives and programmers.
Still, the sneaker brand has struggled to attract consumers outside its tech bubble. Sales fell nearly 20% last year, and the company reported $77 million in net losses.
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Since going public, the business has never made a profit.
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