Shoe Retailer Allbirds Rebrands to Become AI Company

Allbirds, known for its eco-friendly shoes before losing its valuation and closing all full-priced stores, announced this week it was pivoting to become an AI infrastructure business. The company announced Wednesday it had entered into an agreement with an unnamed institutional investor for $50 million and will change its name to NewBird AI, the Associated Press reported.

A company press release said the deal is expected to close in the second quarter. Allbirds plans to use the proceeds to purchase graphics processing units, known as GPUs.

"The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet," the company wrote in the press release. "NewBird AI is being built to help close that gap."

Total Retail's Take: The surprising and frankly strange pivot sent Allbirds' stock soaring Wednesday, jumping 600 percent, according to Yahoo! Finance. In late March, Allbirds sold its footwear assets to American Exchange Group, the company behind Aeroles and Ed Hardy.

AI is already everywhere in retail, and Allbirds' strategic repositioning from a product company to an AI company speaks to the technology's promising future. Companies are rebranding as AI players, and investors are rewarding them, even without a proven execution plan. Other retailers and brands, especially those struggling much like Allbirds was, will be watching closely to see what this pivot can potentially mean for the future of their businesses.