Allbirds shares rockets as shoe brand pivots to AI
Shares in Allbirds surged by over 580 per cent after the struggling shoe brand unveiled a dramatic pivot into AI, betting on soaring demand for tech infrastructure to revive its fortunes.
The Nasdaq-listed firm said it had secured $50m (£37m) in convertible financing to shift into an ‘AI compute infrastructure’ business, focusing on buying high-performance graphics processing units (GPUs) and offering cloud-based services to companies building AI models.
The announcement triggered a frenzy in trading, with volumes surging and the company’s market value rebounding to roughly $150m after collapsing in recent years.
Despite the spike, Allbirds remains more than 90 per cent below its peak valuation following its 2021 IPO, when it was worth around $3bn–$4bn and seen as a breakout consumer brand.
Allbirds targets GPU cloud demand
The move comes just weeks after Allbirds agreed to sell its core footwear brand and assets to American Exchange Group for $39m, effectively exiting the consumer market on which it built its name.
Under its new strategy, the firm has planned to enter the ‘GPU as a service’ market, renting out compute power to businesses developing AI tools, as demand for AI infrastructure continues to outstrip supply.
The group said it had identified a structural shortage in computing capacity as firms race to deploy AI systems, positioning itself as a future supplier of on-demand cloud and processing power.
The pivot marks an odd break from its origins.
Founded in 2015 by Tim Brown and Joey Zwillinger, Allbirds built a global brand around sustainable footwear, becoming a favourite among Silicon Valley workers and high-profile figures such as Ben Affleck and Barack Obama.
But the firm has struggled for years with declining demand and mounting losses, with recent store closures and its share price losing as much as 99 per cent of its value prior to last night’s announcement.
Retail analyst Hitha Herzog likened the share price uptick to a “meme stock”, whilst branding consultant Wei Kan pointed to a “liquidation” of the firm rather than a pivot.
Elsewhere, the AP argued: “Experts are sceptical about how feasible it is for a company to enter the AI infrastructure business with just $50m”.
Indeed, the market is highly capital-intensive, with firms investing tens of billions in data centres and compute capacity, far beyond Allbirds’ initial war chest.