The US company Allbirds Inc. has announced a radical change in strategy. The company, which previously offered sustainable sneakers, is transforming into a provider of computing infrastructure for artificial intelligence (AI). After selling the trademark rights to its sneakers, it plans to rename itself NewBird AI to underline its refocus on the technology sector.
The announcement triggered a clear reaction on US stock markets. The share price rose more than fivefold on Wednesday. The price rose 435 percent to $13.33, which corresponds to a market valuation of $116 million. Despite this recent rally, the company has experienced a significant decline since its 2021 stock market debut. At the time, it reached a valuation of $3 billion before losing about 99 percent of its market value.
Sale of the shoe division
This strategic transformation follows the conclusion of a binding agreement to sell the Allbirds brand and footwear division to the US-based American Exchange Group. The $39 million asset sale marks the end of the company’s operations as an independent footwear manufacturer.
The company has now entered into a binding agreement for $50 million in convertible note financing with an institutional investor. This capital is intended to purchase high-performance graphics processing units (GPUs) to meet the growing demand for AI computing capacity.
Independent retail consultant Bruce Winder told Reuters the move appeared to be an attempt to capitalize on current AI momentum. Winder expressed skepticism about the company’s competitive advantage in the sector, beyond its existing name recognition. Before the newly announced realignment, Allbirds had already closed the majority of its stores due to a lack of demand.
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