Allbirds, the maker of minimalist wool sneakers beloved by Silicon Valley, announced on Wednesday that it is leaving shoes behind and pivoting to artificial intelligence. The new focus and rebrand as “NewBird AI” sent the company’s stock up 582% as of mid-day during a flurry of trading.

The surging stock price and new direction is a bizarre, rapid turnaround for a company that had fallen into disrepair in recent years. Once valued at $4bn, Allbirds’ shares had lost 99% of their worth since 2021 and earlier this month the company announced plans for a $39m sale to brand management firm American Exchange Company.

Allbirds’ declaration that it will concentrate on acquiring graphics processing units to help support AI compute stands out as one of the most baffling pivots of the AI boom, a period in which many companies have tried to shoehorn in AI to appeal to investors and the market. The long-term viability of its plan is less clear than the immediate effect of turning Allbirds into something of a meme stock, with its value wildly fluctuating throughout the day.

“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 said in a statement. “NewBird AI is being built to help close that gap.”

The company has secured $50m in funding from an unnamed investor for its new AI operation, according to a filing with the Securities and Exchange Commission. The filing also said that Allbirds would shift from its status as an eco-conscious public benefit corporation into a conventional corporation, stating that the new company “would be less focused on the public benefit of environmental conservation”.

Allbirds, soon to be NewBird AI, did not respond to a request for comment on its planned rebrand and pivot to AI.

The company for years made sustainability central to its marketing, helping it court politicians and celebrities including Leonardo DiCaprio, who invested in the company in 2018 and touted it as a “model for the footwear industry”. Gwyneth Paltrow, Oprah Winfrey and Barack Obama were among the influential figures seen wearing, or advocating for, the brand.

Despite its initial success, the brand struggled to sustain its momentum and largely fell out of fashion. At the peak of Allbirds’ popularity, it had dozens of brick-and-mortar stores around the world but in recent years faced a drastic decline in sales and in the third quarter of last year declared a $20.3m loss. Allbirds closed the last of its physical stores in the US in January.

Allbirds is now waiting on shareholders to approve American Exchange Company’s purchase of the company in a vote next month. The company said in its statement that the sale will allow Allbirds “to pivot its business to AI compute infrastructure, with a long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider”.