Many companies, from Walmart to United Airlines, have been heavily touting their use of artificial intelligence to get some more love from Wall Street during this AI boom—and some have successfully boosted their stock’s value. Now Allbirds has joined the fray: The shoe company announced on Wednesday it would reinvent itself as an AI computing infrastructure company, despite having no history whatsoever there. Investors bit, driving shares up 600% in afternoon trading.
Allbirds, maker of the once wildly popular wool sneakers favored by the Silicon Valley cognoscenti, announced recently that it was selling itself to a brand management company, American Exchange Group, for $39 million, about 1% of its 2021 peak market capitalization. It gave no indication at the time, however, that such a dramatic pivot was in the works.
On Wednesday, the company announced that it had secured $50 million in financing to turn itself into a tech company with a “long-term vision to become a fully integrated GPU-as-a-service (GPUaaS) and AI-native cloud solutions provider” and that it would change its name to NewBird AI. The company also appeared to back away from its once-touted environmental advocacy, asking shareholders to allow it to remove “references to the company being operated for the environmental conservation public benefit.”
It was, to put it mildly, a surprising move: Allbirds has never offered AI products or services, has zero expertise or history in the field, and has no GPU procurement teams or data center experience. So why do it? We are in an era of intense speculative fervor around AI that has led to big run-ups in stock values at the mere mention of the term.
Many commentators have compared this moment with 2017 and 2018, when a number of companies with absolutely nothing to do with cryptocurrency changed their names and saw shares jump. Remember when Long Island Iced Tea Corp., a small beverage maker, changed its name to Long Blockchain and declared that it would “leverage the benefits of blockchain technology”? Its stock surged 500%, but within months, the shares were delisted from the Nasdaq.
Allbirds last week announced its new “canvas cruiser” collection, along with a partnership with Pantone, the color company. The company did not respond to a request for comment on whether it still planned to pursue the shoe line. Canvas is relatively new territory for a brand famous for its wool shoes—but Allbirds probably has better odds of pulling off a stylistic reinvention within its market category than it will trying to be something it clearly isn’t: an AI player.