Allbirds shares skyrocket after AI pivot, raising concerns over business viability

Allbirds, the San Francisco-based footwear company famous for its Wool Runner sneakers, has announced it is pivoting to become an AI computing infrastructure business. The company will change its name to NewBird AI and has struck a $50 million deal to enter the market for graphic processing units (GPUs). Meanwhile, NewBird AI plans to address the global shortage of computing power by offering on-demand graphics chips, and specialized cloud services for AI.

Following the announcement, the company’s value remains 90% lower than its 2021 IPO peak. Before the pivot, the stock had plummeted from over $500 to roughly $2.50 per share. Analysts have noted a surge in the meme stock phenomenon, fueled by “Al mania” observing that the stock is rising back on a buzzword rather than proven products or earnings. 

The Allbirds shoe brand and its intellectual property will be sold to American Exchange Group -owners of Aerosoles and Ecko Unltd-for $39 million.

Some experts such as branding consultant Wei Kan, describe the move as a liquidation rather than a pivot, suggesting the company is simply using its existing stock market listing as a shell to launch a completely unrelated business. Founded in 2025, AllBirds quickly became a Silicon Valley staple, worn by figures like Barack Obama and Ben Affleck. 

Despite its early popularity and global expansion, the company has struggled to turn a profit since going public in 2021, leading to the desperate need for a new direction.

The announcement gives the NewBird AI a shell to trade on, but “a stock going from $3 to $17 on a press release doesn't restore $4bn in destroyed value,” Kan said.