S.F. shoe brand Allbirds says it will become an AI company, sending shares soaring

The company announced it secured a $50 million convertible financing agreement with an institutional investor to move into AI compute infrastructure. The deal is expected to close in the second quarter, pending shareholder approval, the company said.

Allbirds said it intends to rebrand as "NewBird AI" as part of the transition.

Allbirds said it plans to use the new funding to acquire high-performance graphics processing units, or GPUs - the specialized chips used to train and run AI systems - and lease that computing power to customers.

The announcement marks a striking turn for a company once synonymous with Silicon Valley's work uniform. Founded in 2015, Allbirds built its reputation on sustainability-focused sneakers but has struggled in recent years with declining sales, rising costs and a shrinking retail footprint.

Just weeks ago, the company said it would sell its brand and footwear assets to American Exchange Group for about $39 million, allowing that firm to continue producing Allbirds products.

"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 its announcement.

The strategy centers on building what it describes as a "GPU-as-a-Service" business, offering dedicated computing capacity to companies that cannot reliably access it through traditional cloud providers.

Shares of Allbirds rose sharply Wednesday morning, at one point jumping 600% as trading volume surged.

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