Allbirds Is Getting Out of the Shoe Business and Pivoting to AI Infrastructure

Allbirds rose to prominence selling sustainable Merino wool sneakers that became the signature uniform of the Silicon Valley tech crowd in the late 2010s before rapidly losing popularity on the heels of its 2021 IPO. Faced with possible extinction, the company is now jumping on the AI hype train. Sales have been declining for a couple of years now, and Allbirds announced earlier this year that it would close all of its brick-and-mortar stores. Then, last month, it announced a $39 million sale of the company to American Exchange Group, which operates brands like Ed Hardy. Most thought that would be the end of it. But they were wrong. On Wednesday, Allbirds announced that it was reinventing the company as an AI infrastructure company. American Exchange Group will keep Allbirds, the shoe brand, going. But Allbirds, the company, will now go by Newbird AI, that is, if it secures stockholder approval at an upcoming meeting in mid-May. To do so, the company agreed with an institutional investor on a $50 million convertible financing facility, i.e., debt that the investor can convert into equity later. With that money, “Newbird” aims to buy GPUs. The long-term plan is to “become a fully in