Allbirds, the eco-friendly shoe company that rode early hype in the tech and consumer markets and later ran into financial headwinds, is betting its next chapter will be built on artificial intelligence infrastructure. The San Francisco-based company said it has signed a definitive agreement with an unnamed institutional investor for $50 million in financing, a move it described as a shift to AI and one that it said will culminate in a new corporate name: NewBird AI.
In a release, Allbirds said it plans to use the financing to buy graphics processing units, known as GPUs, which are central components for training and running many AI systems. The company said it expects the transaction to close during the second quarter of this year, setting the timeline for a transition that also involves changing its identity from a footwear brand to what it portrays as an AI-compute provider.
The pivot arrives after a series of setbacks for Allbirds as the footwear business changed and the company cut back. The announcement comes more than two weeks after Allbirds sold its intellectual property and certain other assets and liabilities to American Exchange Group for $39 million. Allbirds had described earlier decisions to avoid issuing its quarterly earnings report scheduled for March 31, underscoring how sharply its business circumstances had shifted.
Allbirds’ current plan also reflects how companies are being pulled into the AI compute stack amid demand for high-performance systems. “The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in the release. “NewBird AI is being built to help close that gap.”
Some industry analysts questioned the strategic logic of a shoe maker moving into GPU-centered infrastructure. “On the surface, it’s a strange pivot,” said AI infrastructure expert Bill Kleyman, who described the shift as an unusual adjacency. Kleyman said he has been in the industry a while and that a company like Allbirds moving from shoes into AI infrastructure is “not a very natural adjacency,” noting the operational challenge of turning capital into working compute at scale.
Kleyman said the mechanics of building and operating physical AI infrastructure go beyond owning chips. “The business of running physical AI infrastructure ‘requires access to GPUs in a constrained market, long-term power agreements, advanced cooling strategies, and a credible operating model,’” said Kleyman, who is CEO and co-founder of Apolo. The compute provider business, in his description, depends on acquiring large quantities of GPUs and operating data-center infrastructure typical of cloud-focused firms, such as those that run large workloads for AI customers.
The plan also faces skepticism from a second set of infrastructure-focused views. Jim Piazza, who worked on computing infrastructure at Meta and now is chief AI officer at IT services firm Ensono, said the market may be right about real demand but wrong about how easy the pivot is. Piazza said building a real AI infrastructure business “takes deep capital, technical expertise and disciplined execution,” and that it is “crazy hard for tech-savvy companies” and an “impossible challenge” for someone outside the space.
Wall Street response to the announcement has been swift. Shares of Allbirds rose more than 600% on Wednesday and were hovering nearly $18 in late afternoon trading, compared with about $3 just days earlier. Kleyman said the surge looked “more like initial excitement and speculative momentum tied to anything AI rather than validation of execution,” adding that $50 million is not a large amount to enter an infrastructure-heavy market and that many companies appear to want to become AI companies at once.
The company’s pivot marks a sharp reversal from its earlier peak valuation, which it reached at roughly $4 billion in late 2021. Founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger, Allbirds built its brand around natural materials rather than synthetics, including its later debut of an iconic wool runner shoe. But observers noted that the company expanded aggressively into physical stores and that consumer interest waned, leading to a focus on e-commerce and other channels.
In February, Allbirds shuttered most of its remaining stores to focus on e-commerce, partnerships, and international distributorship, while still operating two outlet stores in the United States and two full-price locations in London. As it now pursues NewBird AI, the company is framing the change as a narrative reset tied to AI compute demand—while analysts warn that the transition could be difficult to execute without the infrastructure, capital planning, and technical depth the business requires.