In this modern era where seemingly every tech company is defined by its relationship with AI (or lack thereof), Allbirds has made perhaps the most 180-degree corporate pivot we've ever seen.
In case you're unfamiliar, Allbirds was a direct-to-consumer company that made wool sneakers popular among Silicon Valley types in the 2010s. Take note of the past tense, because the company announced in a statement this week that it is completely abandoning the shoe business to instead become an AI firm.
An unspecified investor has agreed to pony up $50 million to fund the brand's pivot to AI compute infrastructure; the money will go towards data center tech instead of shoe production.
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Allbirds has also changed its name to NewBird AI. In a company statement, it proclaimed that it would help facilitate access to AI hardware for clients.
"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 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."
It wasn't that long ago that Allbirds was riding high, and after a 2021 IPO, the company reached a peak valuation of over $4 billion. Amid the tech startup boom of the last 15-ish years, Allbirds Merino wool sneakers were commonplace in Bay Area tech offices. However, it's been a rough five years for the brand, and after failing to find a wider market, it was sold for pennies on the dollar to a brand management firm in March, according to the New York Times.
For what it's worth, NewBird AI stock rose 600 percent after the announcement, per the Times.
Still, it's highly unusual to see a clothing company completely drop the clothing part of its business in favor of buying up GPUs to lease to clients. Many companies, big and small, have pivoted towards AI in one way or another in recent years, with varying degrees of success.
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