Many companies, from Walmart to United Airlines, have heavily promoted the use of artificial intelligence during this AI boom to get more attention from Wall Street – and some have successfully increased the value of their stocks. Now Allbirds has joined the fray: The footwear company announced Wednesday that it would reinvent itself as an AI computing infrastructure company, despite having no history there at all. Investors rallied, sending shares up 600% in afternoon trading.
Allbirds, the maker of the once wildly popular wool sneakers beloved by Silicon Valley cognoscenti, recently announced that it would sell itself to a brand management firm, American Exchange Group, for $39 million, about 1% of its peak 2021 market cap. At the time, however, there was no indication that such a dramatic turning point was in the works.
On Wednesday, the company announced that it had secured $50 million in funding to transform itself into a technology company with a “long-term vision of becoming a fully integrated provider of GPU-as-a-Service (GPUaaS) and AI-native cloud solutions” and that it would change its name to NewBirdAI. The company also appeared to back away from its once-touted environmental commitment, asking shareholders to allow it to “remove any evidence that the company is operating to protect the environment in the public interest.”
It was a surprising move, to say the least: Allbirds has never offered AI products or services, has no expertise or experience in the field, and has no GPU procurement teams or data center experience. So why? We are in a time of intense speculative passion for AI, which has caused stock values to rise sharply at the mere mention of the term.
Many commentators have compared this moment to 2017 and 2018, when a number of companies that had nothing whatsoever to do with cryptocurrency changed their names and saw their prices rise. Remember when Long Island Iced Tea Corp., a small beverage company, changed its name to Long Blockchain and stated that it would “leverage the benefits of blockchain technology”? Its shares rose 500%, but within months the shares were delisted from the Nasdaq.
Allbirds announced its new “Canvas Cruiser” collection and a partnership with paint company Pantone last week. The company did not respond to a request for comment on whether it still plans to pursue the shoe line. Canvas is relatively new territory for a brand known for its wool shoes — but Allbirds probably has a better chance of creating a stylistic reinvention within its market category than by trying to be something it clearly isn’t: an AI player.
