No longer selling shoes, now selling computing power! Eco-friendly shoe company Allbirds transforms into AI infrastructure, stock price soars sevenfold.

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The eco-friendly shoe brand Allbirds, once wildly popular in Silicon Valley, announced it is completely abandoning its footwear business to transform into an artificial intelligence computing infrastructure company—an unexpected strategic shift that caused its stock price to soar sevenfold in a single day.

On Wednesday, Allbirds published an announcement on its investor relations page, declaring its business focus would shift to AI computing infrastructure and that the new company would be named NewBird AI. The company simultaneously announced a fundraising plan of up to $50 million, expected to be completed in the second quarter of 2026.

This transformation occurs as Allbirds is mired in operational difficulties.

In February this year, the company shut down all of its directly operated U.S. stores and last month announced it would sell its intellectual property and related assets to brand management firm American Exchange Group for $39 million. From 2022 to 2025, Allbirds’ revenue was nearly cut in half, falling from $298 million to $152 million.

Transformation to AI Computing Infrastructure

According to the announcement, NewBird AI’s initial plan is to focus on procuring high-performance, low-latency AI computing hardware and to provide access to clients via long-term leasing, positioning itself to fill the supply gap that spot markets and hyperscale cloud providers cannot reliably meet.

Allbirds stated in the announcement: "The company will prioritize securing high-performance, low-latency AI computing hardware, and provide access through long-term leasing arrangements to meet client needs that spot markets and hyperscale providers cannot reliably cover."

The AI infrastructure sector has high entry barriers and requires massive investment, but the potential returns are substantial. For example, in the GPU market, Nvidia’s dominance has driven its value close to $5 trillion, making it one of the world’s most valuable companies.

A Brand in Distress, Switching Tracks to Survive

Allbirds was co-founded in 2015 by former professional footballer Tim Brown and renewable resources expert Joey Zwillinger, originally focused on creating a new footwear brand that replaced plastics and petroleum-based materials with natural alternatives.

The first product, the Wool Runner, launched in 2016 and made from merino wool, quickly won over Silicon Valley tech circles, and the company went public in 2021, where it was valued at more than $4 billion at its peak.

However, as consumer trends shifted, competitors flooded in, and customer acquisition costs continued to rise, the company’s performance plummeted. Over three years, revenue dropped nearly 50% cumulatively.

After this $39 million asset sale, American Exchange Group will continue to operate the Allbirds brand and sell related products, while the public entity will become an “empty shell” to complete the business switch.

Chasing Hot Sectors is a Familiar Capital Market Playbook

Allbirds is not the first struggling company to boost its stock price by rallying around a hot new concept. Since OpenAI’s ChatGPT ushered in an AI boom in 2022, Wall Street’s enthusiasm for AI-related stocks has only grown.

Market watchers point out that, previously during the Bitcoin bull market, many struggling companies reactivated market interest by announcing blockchain business plans or pivoting directly into cryptocurrency—Allbirds’ transformation is reminiscent of this historical pattern.

Currently, the fundraising has not yet closed, and there is significant uncertainty as to whether the new business can materialize. For investors, a one-day 300% share jump is certainly eye-catching, but whether this once-renowned shoe brand can truly gain a foothold in the fiercely competitive AI infrastructure market remains to be seen.

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