After agreeing to sell all its assets last month for less than 1 percent of its previous $4 billion valuation, the shoe company Allbirds announced on Wednesday that it would “pivot its business” to artificial intelligence.
The company, once the maker of Silicon Valley’s favorite shoe (a Merino wool sneaker symbolized the venture capital boom of the 2010s), went public in 2021. Five years later, after struggling to capture a wide customer base and turn a profit, Allbirds sold its business to a brand management company for $39 million.
In a statement, the company, which is based in San Francisco, said that an unnamed investor had agreed to spend $50 million to finance a shift to A.I. infrastructure. That money, the company said, will be used to buy graphics processing units, known as GPUs, powerful chips that can run calculations and analyze enormous amounts of data. (The amount is a drop in the bucket for an industry that measures spending in the tens of billions and even trillions.)
The business, no longer in sneakers, will also have a new name: NewBird AI.
“The rise of A.I. development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said. It added that developers and research groups were struggling to secure the resources needed to build, train and run A.I. at scale.
“NewBird AI is being built to help close that gap,” the company said.
On Wednesday, the company’s stock rose by nearly 600 percent, closing at $16.99. A few days ago, the stock was trading at less than $3. For more than a year, investors have flocked to, and driven up, A.I. stocks.
In recent years, several companies have pivoted in an attempt to capitalize on a data-center construction boom tied to the fast-growing A.I. industry.
In 2019, as cryptocurrency prices slid, the company Atlantic Crypto renamed its business CoreWeave, betting that GPU chips would eventually feed the development of artificial intelligence, whose creation also requires substantial computing power. When OpenAI released the ChatGPT chatbot in 2022 and unleashed an A.I. frenzy, the demand for computing power exploded.
In September, OpenAI signed a deal with the tech giant Oracle to build $300 billion in computer infrastructure that people with knowledge of the deal said would be used to develop artificial intelligence technologies.
But Allbirds is making a far starker pivot, said Bill Kleyman, an A.I. infrastructure expert and the chief executive of Apolo.us, which builds tools to develop A.I.
“At first it read like a really well-executed April Fools’ joke,” Mr. Kleyman said of the Allbirds announcement. But, he added, “given the craziness of this industry right now, maybe we shouldn’t be surprised.”
Other companies that had made the leap to A.I. were, in most cases, beginning with similar infrastructure, Mr. Kleyman said. Allbirds’ plan seemed more like a complete reset, and one that would most likely require far more than a $50 million investment to get off the ground, he added.
“Every company wants to be an A.I. company — some of those shifts are real and strategic, others feel a lot more reactive,” Mr. Kleyman said. “The underlying business is struggling; A.I. presents itself as a compelling narrative reset, and off we go.”
Founded in 2015 by a New Zealand soccer star and a clean-technology entrepreneur, Allbirds used wool and castor bean oil to produce shoes, marketing them as sustainable and minimalist attire. They soon become a staple of tech office wear, filling the wardrobes of Bay Area executives and programmers.
In an attempt to globalize its product, Allbirds opened dozens of stores in the United States and around the world, including in Britain, China and New Zealand. Executives spent millions to try to lure consumers with splashy television ads, pushing new versions of the wool shoes.
Yet the sneaker brand struggled to attract shoppers outside its tech bubble, with all of the Allbirds stores in the United States closing, except for two outlet stores. Sales fell nearly 20 percent last year, and the company reported $77 million in net losses.
Since going public, the business has never turned a profit.
Allbirds, which advertises “sustainability in every step,” said in a regulatory filing that the company would ask stockholders, who must approve the asset sale, to also approve the removal of “references to the company being operated for the environmental conservation public benefit.”
The soaring electricity demands of data centers and A.I. infrastructure are straining the grid in some areas, pushing up emissions and slowing the energy transition.
Livia Albeck-Ripka is a Times reporter based in Los Angeles, covering breaking news, California and other subjects.
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