Struggling shoe retailer Allbirds makes bizarre pivot from shoes to AI, stock explodes more than 700%
Allbirds announced Wednesday that it is pivoting from sustainable shoes to artificial intelligence compute. The company, valued around $4 billion at its peak, sold its intellectual property and other assets two weeks ago for $39 million.
CNBC — Allbirds made a surprising announcement Wednesday that it is pivoting from shoes to artificial intelligence . The move boosted shares of the miniscule market cap company — it was valued at about $21 million at Tuesday's close — by more than 400%. The shares, which were under $3 a day ago, jumped to above $13.
The company announced that it's pivoting its business to AI compute infrastructure on Wednesday in a release posted to its investor relations page. The new company, which expects to be called NewBird AI, announced a deal to raise up to $50 million in funding, expected to close in the second quarter of 2026. "The Company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service," the company said in the announcement.
Allbirds announced a deal with American Exchange Group to sell its intellectual property and other assets for $39 million last month. American Exchange Group is a brand management company focused on the accessory space. According to the release, it will continue to sell products under the Allbirds brand.
Allbirds closed all of its U. S. full-priced stores in February.
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There's a history in the stock market of troubled companies pivoting to the hot industry of the moment in order to garner interest. During the Bitcoin boom, several companies would announce a blockchain tie-in or convert outright to a cryptocurrency company to reignite interest in the stock. Once a Wall Street darling valued north of $4 billion, Allbirds was founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger.
The idea was to create a new category of shoes that didn't rely on plastics and other petroleum products but instead, natural materials. In 2016, they introduced their debut shoe – the Wool Runner – made with merino wool and became an instant success , particularly among "tech bros" that were drawn to the brand's comfort and sustainability. It embarked on an ambitious store opening plan and went public in 2021 , but soon saw its business begin to slow as trends changed, competitors moved in and customer acquisition costs rose.
Between 2022 and 2025, sales plummeted nearly 50% – falling from $298 million to $152 million.