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New York
Shares of Allbirds, the 2010s pioneer of trendy sneakers and eco-conscious Millennial marketing, took flight in an almost comical fashion Wednesday morning after the company announced an extremely 2026 pivot: abandoning its environmental agenda and getting into the AI business.
The stock, which had been in the gutter since its November 2021, shot up more than 600% Wednesday. It closed at $14.50, up 582% from Tuesday’s close.
The catalyst came from Allbirds’ announcement that the company, once valued at $4 billion, would soon re-emerge as a new entity with a focus on “AI compute infrastructure.”
Translation: It’s going to essentially buy and rent out computing power to tech startups.
The shift comes just a few weeks after Allbirds sold its footwear assets and branding to American Exchange Group, which specializes in selling licensed fashion accessories with already-existing recognizable brand names, for just $39 million.
Allbirds, which will be rechristened “NewBird AI,” said it executed a $50 million deal with an unnamed institutional investor to acquire “high-performance GPU assets” to begin transitioning into a “fully integrated GPU-as-a-Service.”
Despite the stock’s sudden surge, though, Allbirds remains a shell of its former self: Its market value was shy of $150 million at Wednesday’s closing bell.
It’s worth underscoring: This sneakers-to-AI pivot is not exactly part of the standard corporate playbook, and the novelty may have amplified investors’ early enthusiasm.
But the shift is notable for another reason: Allbirds’ low-profile, “sustainable” wool-based shoes quickly became a Silicon Valley wardrobe staple when they launched in 2016 — arguably the peak of the lower-case-L liberal do-gooder era of retail, when marketers convinced upwardly mobile office workers that they could simply shop their way to the low-carbon, zero-waste future they believed was in reach.
Allbirds were more than sneakers; they were political statements, alerting wearers’ status to fellow members of the coastal Millennial techno-optimist tribe. Now, the go-to tech-worker accessory has become the tech itself. And the tech itself is just the abstract promise of “compute” to power AI products that aren’t exactly turning a profit yet.
That doesn’t mean the new brand, “Newbird AI,” is doomed. But it does illustrate Silicon Valley’s — and Wall Street’s — seeming willingness to reward any company that slaps the words “artificial intelligence” into its pitch decks.
Underscoring just how much has changed since Allbirds’ heyday, the new company also plans to abandon its foundational commitments to environmental conservation.
The company, which once touted “sustainability in every step,” was established as a certified B Corp, or a for-profit business with higher-than-usual standards for its social and environmental impact. But its new business is a notoriously energy intensive process, so the company plans to ask shareholders next month to approve a charter amendment to remove “references to the company being operated for the environmental conservation public benefit,” according to a regulatory filing.
To be sure, Allbirds’ footwear business hadn’t been going great lately.
The company stumbled as it grew rapidly, opening dozens of stores across multiple continents but failing to move enough inventory to make them profitable.
“Allbirds has gone from being a highflyer to a dead parrot,” GlobalData analyst Neil Saunders said in a note last month as the company was nearing a deal with American Exchange.
The reason for the lack of traction, Saunders wrote, was that Allbirds’ sustainability pitch “has never been a key consideration for most footwear consumers,” who are more concerned about style, price and comfort.
In the immortal words of Monty Python, this bird is no more.
Allbirds is hardly the first to do a full 180 to chase momentum around new tech. It’s also not uncommon for such pivots to signify a bit of irrational exuberance in the market.
Take onetime soft drink maker Long Island Iced Tea Corp., which capitalized on the crypto craze of 2017 to rebrand as a blockchain technology company, even renaming itself “Long Blockchain.” While the initial pivot sent the stock up 380%, it didn’t quite work out in the long run: The Securities and Exchange Commission charged three people with insider trading, the company never became an operational player in blockchain tech, and its shares were delisted in 2021. (The SEC eventually settled with two of the individuals, and a case against the third is ongoing.)
And as the tide has turned for crypto, several bitcoin mining firms have restructured themselves to focus on AI infrastructure instead.
But the extreme market reaction to Allbirds’ move may be without precedent.
“The motivation behind the corporate pivot is sensible, the market reaction less so,” Steve Sosnick, chief strategist at Interactive Brokers, told me. “A 6x or 7x move for a company that is literally ditching its prior business model for one in which it has no demonstrated expertise says quite a bit about a market froth and investor willingness to chase moves.”