- Allbirds is pivoting to AI
- The new company is called NewBird AI
- It’ll sell AI GPU space, but why did Allbirds choose this path, and what does it really mean?
I discovered Allbirds on TikTok. The social media platform might be a source of entertainment and information for some, but it’s increasingly where I find tantalizing brands for products I end up loving. Shoe and apparel maker Allbirds was one of them. Now it’s NewBird AI, an AI infrastructure company, in a pivot that makes about as much sense as wrapping slices of bologna around your feet and calling them sandals.
As a loyal customer who once took his wife to the sole New York City Allbirds store and convinced her to buy a pair of $100 slip-ons, I watched with dismay as the once high-flying viral shoe company narrowly avoided bankruptcy.
Up until a week ago, I was still receiving two or three promotional Allbirds texts per month, and I would’ve happily bought another one of their lightweight, extremely comfortable, and, yes, washable shoes.
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I don’t know exactly where things went wrong with Allbirds, but now I, and most of the rest of the world, know where it’s going.
Early on Wednesday, the company put out a press release which reiterated that the Allbirds assets had been sold to American Exchange Group, which, according to the release, “intends to continue to build on Allbirds’ legacy and deliver compelling products to Allbirds’ customers.” That sounds like it means the AllBirds brand of shoes will continue. But the rest of the release is a business jargon-filled word salad.
Even though they sold the assets, vestiges of the Allbirds company remain, which trades publicly on the NASDAQ. That company apparently secured $50m in financing “to pivot its business to AI compute infrastructure.”
And the long-term vision is selling AI GPU space or cycles as a service, which it calls “GPU aaS”. Oh, and the new name is NewBird AI.
Look, I have no problem with this business concept. GPU access demand for AI model building and prompt processing is at an all-time high. Smaller companies may want something like an AWS for AI to rent out cycles for their small-to-medium-sized businesses. Such a service lets the smaller players appear to be the bigger ones to their customers. If they want an AI chatbot on their site, perhaps they rent out cycles from NewBird AI.
What I don’t get is what this has to do with shoes. AllBirds sells stylish, well-made shoes and sneakers. It was an excellent online retailer, at least from this customer’s point of view. Look, I was so excited when I got my first pair, I did a TikTok unboxing.
You might argue that everything in life is now connected to AI. There’s no reason Allbirds…I mean, NewBird AI… can’t be connected, too. I guess. What I really think, though, is that this is a craven attention play. AllBirds business is pretty much dead (maybe), but the brand has a profile. NewBird AI’s financers clearly think there’s huge, if temporary value in the name.
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Weirdly, so do investors. News of the pivot sent AllBirds stock skyrocketing. In the morning, it was under two dollars. By the afternoon, it was trading at over $20 a share. I don’t know what that says about the average investor’s overall intelligence. Do they think the bizarre intersection of a former shoe brand and AI is a winning combination?
As I said, there’s some value in the idea, but no reason to associate it with the brand in any way. And what of Allbirds? I visited the site and launched the live chat, where I found a sales assistant named Sophie (who may have been AI).
I wrote, “What’s this I hear about you pivoting to AI?”
Sophie: “Hi there! This is Sophie from Allbirds here, thanks for reaching out! 😊 Could you share a bit more about what you’ve heard regarding us ‘pivoting to AI’? I’m here to help with any Allbirds-related questions you have.”
Me: “I’m told you are being renamed to NewBird AI and will be selling AI services. Will you also still sell shoes?”
Sophie: “I’m here to help with Allbirds shoes, orders, or services. Is there something specific I can assist you with today?”
Since I knew Sophie wouldn’t answer me about New Bird AI, I pivoted to finding out if they still planned on shipping shoes next week.
Sophie: “Yes — Allbirds is still selling and shipping shoes, so you should be able to place an order next week.”
In fact, Sophie was cool with me waiting even longer, like a month.
Sophie: “Yes — that should be fine. Allbirds is still selling and shipping shoes, so you can wait until next month if you’d like.”
This makes some sense, because the former Allbirds did sell its assets to American Exchange Group, which owns fashion brands like Aerosoles, Alexis Bendel, and Ed Hardy. So perhaps my once-favorite shoe brand (kind of into Hey Dude now) may live on under its ample umbrella of fashion and products.
As for NewBird AI, it seems like the new company leveraged the old AllBirds brand name for just long enough to make a boatload of seed capital from the stock exchange. NewBird AI is, in the end, a sole-less enterprise that ultimately bears no relationship to the Allbirds legacy.
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lance.ulanoff@futurenet.com (Lance Ulanoff)
