Tim Brown, co-founder and co-chairman of sports shoe manufacturer Allbirds, speaks on stage at the digital trade fair OMR Festival on May 10, 2023.
Marcus Brandt | Picture Alliance | Getty Images
allbirds made a surprising announcement Wednesday that it is pivoting from shoes to artificial intelligence.
The move boosted the company’s minuscule market capitalization’s stock price (valued at about $21 million at Tuesday’s close) by more than 700%. The stock price rose from less than $3 a day earlier to more than $17.
The company announced in a release posted on its investor relations page that it will focus its business on AI computing infrastructure.
The company, to be called NewBird AI, announced a deal to raise up to $50 million in funding and is expected to close in the second quarter of 2026, according to a release.
“We will initially acquire high-performance, low-latency AI computing hardware and aim to provide access under long-term lease agreements to meet demand from customers that cannot be reliably served by spot markets or hyperscalers,” the company said in an announcement.
Allbirds, once a Wall Street darling with a market capitalization of more than $4 billion, last month announced a deal with American Exchange Group to sell its intellectual property and other assets for $39 million.
American Exchange Group is a brand management company focused on accessories. According to the release, products will continue to be sold under the Allbirds brand.
Allbirds closed all full-price stores in the U.S. in February.
The company is the latest company to cash in on the AI boom that has set off a frenzy on Wall Street since OpenAI unveiled its ChatGPT chatbot in 2022.
AI infrastructure is a notoriously expensive and complex business, but it can be lucrative. NvidiaThe company, which dominates the graphics processing equipment market, has grown to become the world’s most valuable company, with a market capitalization approaching $5 trillion.
The stock market has a history of troubled companies pivoting to popular industries at the time to garner attention. Amid the Bitcoin boom, several companies announced partnerships with blockchain or announced complete transformation into crypto companies to reignite interest in their stock.
Allbirds was founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger to create a new category of footwear that relies on natural materials rather than plastics and other petroleum products.
In 2016, Allbirds introduced its debut shoe made from merino wool, which was an instant success, especially among the “tech crowd” who were drawn to the brand’s comfort and sustainability credentials.
The company embarked on an ambitious store opening plan and went public in 2021, but its performance soon began to slow due to changing trends, competitors moving in, and rising customer acquisition costs.
From 2022 to 2025, revenue plummeted by nearly 50%, falling from $298 million to $152 million.
Allbirds’ daily stock price chart.
—CNBC’s Ashley Capoot contributed to this report.
