An unusual pivot from footwear to artificial intelligence (AI) has prompted renewed interest in the San Francisco-based shoe company Allbirds.
The shoe company, worn by the likes of Ben Affleck, Jennifer Lopez, Barack Obama, and other A-list celebrities, faced a major problem as early as 2022.
Allbirds' revenue was flagging, prompting it to announce the closure of its US brick-and-mortar stores.
The footwear brand is now venturing into AI and has secured a $50 million investment to transform into “NewBird AI.”
Allbirds will take on the new name in anticipation of becoming a “fully integrated GPU-as-a-Service and AI native cloud solutions provider,” the company said.
The company has identified a gap in the market, as the advent of AI has increased the demand for GPUs and other specialized technologies that “the market is struggling to meet.”
This rapid adoption has caused overcrowding in North American data centers, and resources are becoming increasingly scarce.
What this signals is that developers, researchers, and companies are unable to obtain the resources they need to build, develop, train, and run their AI at the rate they want, Allbirds said.
At the start, NewBird AI (formerly Allbirds) will buy “high-performance, low-latency AI compute hardware” like GPUs and accelerators, to let customers run their AI models fast and with little delay.
NewBird AI will also offer long-term lease arrangements for such resources, which aim to fill gaps where other providers can’t.
The footwear brand that was once bolstered by tech bros and Silicon Valley veterans seems to be executing an exit strategy with this “pivot.”
This move has been likened to liquidation rather than a genuine transition into an area of interest by branding consultant Wei Kan from Conduit Asia, the BBC reports.
Despite this potentially disingenuous entrance into AI, Allbirds' shares have risen by 582% since the announcement.
However, excitement surrounding the new venture is likely a result of hysteria generated by social media users and could just be “meme stock,” retail analyst Hitha Herzog told the BBC.
“Meme stock” is the phenomenon in which a company’s stock soars significantly due to excessive promotion on platforms or social media discussions.
With this dramatic increase in share value, possibly driven by hype, it remains to be seen if a pivot to AI will be enough to save Allbirds.
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