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👟 Allbirds is making a huge shift in its business model
🤖 After losing 50% of its sales, the now-defunct brand is pivoting from shoes to… AI
🦾 It’ll be called NewBird AI and turn into “a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider”
📈 After the news broke, the company’s stock spiked over 700%
Allbirds was once known for its exceptional shoes and sneakers that were breathable, comfortable to wear all day, and fashionable for any occasion. But now that the company has virtually gone completely under, desperate attempts are being made to save the company and its IPO, and it seems that it’s time for the most desperate of them all: a hard pivot to AI.
In a news release, Allbirds confirmed that it plans to be rebranded to NewBird AI, shifting from a shoe supplier to one that’ll handle your company’s AI needs. CEO Joe Vernachio says that pending a $50 million investment, it’ll allow the company to “pivot its business to AI compute infrastructure, with a long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider.” The shift will need shareholder approval, with a vote scheduled for May 18.
It’s unclear whether Vernachio plans to build from the ground up or if resources from Allbirds’ infrastructure will be used for the new venture, but it seems likely that something about what Allbirds had access to made sense to transform it into a data center for AI. At the same time, this also feels very similar to what happens to zombie companies when people stop buying their product. (Remember when RadioShack became a cryptocurrency scam? Good times.)
Vernachio justifies the transition by harping on the growing need for more data centers and GPUs, which seems to resonate well with investors given that the company’s stock (BIRDS) skyrocketed over 700% following the news. At the time of writing, its stock is still over 580% higher than it was at opening.
Vernachio shared more of his vision in the news release.
The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet. Global enterprise spending on AI services and data center investment are on the rise. At the same time, GPU procurement lead times are increasing for high-end hardware, North American data center vacancy rates have reached historic lows, and market-wide compute capacity coming online through mid-2026 is already fully committed. The result is a market where enterprises, AI developers, and research organizations are unable to secure the compute resources they need to build, train and run AI at scale.
NewBird AI is being built to help close that gap. 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 dramatic shift in business model seems like the ultimate Hail Mary attempt at saving whatever’s left at Allbirds. It’s already sold off its name and assets to American Exchange Group for $39 million, and it seems that there’s enough scraps to put together an… AI data center conglomerate?
I don’t know, man. Maybe you should’ve just worked harder at making shoes.
Max Buondonno is an editor at The Shortcut and co-host of The Shortcut Live. He’s been reporting on the latest consumer technology since 2015, with his work featured on CNN Underscored, ZDNET, How-To Geek, XDA, TheStreet, and more. Follow him on X @LegendaryScoop and Instagram @LegendaryScoop.
