After agreeing to sell all its assets last month for less than 1% of its previous US$4bil (RM15.7bil) valuation, the shoe company Allbirds announced Wednesday that it would “pivot its business” to artificial intelligence.
The company, once the maker of Silicon Valley’s favourite shoe (a Merino wool sneaker symbolised 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 US$39mil (RM154mil).
In a statement, the company, which is based in San Francisco, said that an unnamed investor had agreed to spend US$50mil (RM197mil) to finance a shift to AI infrastructure. That money, the company said, will be used to buy graphics processing units, known as GPUs, powerful chips that can run calculations and analyse 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 AI development and adoption has created unprecedented structural demand for specialised, 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 AI 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%, closing at US$16.99 (RM67.10). A few days ago, the stock was trading at less than US$3 (RM11.85). For more than a year, investors have flocked to, and driven up, AI stocks.
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 globalise 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% last year, and the company reported US$77mil (RM304mil) 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.”
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This article originally appeared in The New York Times.
