Allbirds leaves footwear behind and pivots to AI computing

Struggling footwear brand Allbirds, known for its distinctive “Wool Runner” sneakers, has announced that instead of closing down, it is pivoting to become an AI computing business.

The surprise announcement follows the sale of its brand assets, including its intellectual property and certain other assets and liabilities, for $39 million (£31 million) to the brand management firm American Exchange Group earlier this month.

As part of the deal, which was at that point still subject to shareholder approval, the Allbirds company was to be dissolved and wound down. Instead, it has now announced that it raised $50 million (£37 million) in financing and is pivoting to become an AI company.

That means that while the Allbirds brand will likely continue to produce footwear under its new ownership, the corporate entity of the same name is turning its back on the fashion industry altogether. Under its new name, “NewBird AI”, it is positioning itself as a technology company and capitalising on the current AI market boom.

Allbirds explains that its somewhat strange reinvention is a response to the rise of AI development and adoption in the global market. With enterprise spending on AI services increasing, it says that it sees a gap in the market for specialised, high-performance computing services, especially as demand for data storage and processing outstrips current supply.

The company plans to use the initial capital from the new financing round to acquire high-performance Graphics Processing Unit (GPU) assets, which are chips that power AI workloads, and supply them to businesses that are looking to build AI tools with on-demand computing power and cloud services.

Its long-term vision is to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider, and at some point down the line, will consider strategic merger and acquisition (M&A) opportunities.

As a shoe company, Allbirds was struggling. Its last financial filings for Q3 2025 showed a 23.3% decline compared to the year before, with net revenues of $33 million (£25 million), and margins also declining.

Allbirds attributed the results, which were in line with expectations, to structural changes within the company as part of its turnaround strategy to support profitable growth. Vernachio added at the time that the company was "taking definitive steps to further reduce costs, enhance liquidity, and pursue value-creating opportunities".

Since going public in 2021, it has seen a 99% drop in its stock, which even this latest announcement has not been able to fully restore. It is now valued at around 90% less than its initial IPO.