Allbirds Abandons Shoe Business, Pivots to AI as NewBird AI
Allbirds announced Wednesday it's abandoning its shoe business to become an AI company called NewBird AI. The struggling footwear brand secured $50 million in funding for the dramatic pivot and will focus on AI computer infrastructure instead of wool sneakers.
Allbirds, the San Francisco company famous for its wool sneakers, announced Wednesday it's completely abandoning shoes to become an artificial intelligence business called NewBird AI.
The company struck a $50 million convertible financing deal to fund its transformation into an AI compute infrastructure company. Allbirds was valued at just $21 million before the announcement, showing how much the once-hot startup had struggled.
Allbirds became a Silicon Valley favorite with its sustainable wool trainers, but the company couldn't turn that buzz into lasting profits. The shoe business will be sold off as part of the pivot.
The dramatic career change mirrors the 2017 frenzy when struggling companies added "blockchain" to their names to boost stock prices. Some observers are calling this move another sign of an overheated AI market where companies make desperate pivots to chase investor excitement.
Allbirds joins other businesses trying to reinvent themselves as AI companies, hoping the technology trend will rescue their fortunes where their original products failed.
This wild business switch shows how desperate some companies are to cash in on the AI boom. It also signals that the trendy shoe brand that Silicon Valley loved couldn't make money selling footwear, raising questions about other buzzy startups.
Watch for details on who buys Allbirds' shoe business and whether NewBird AI can actually deliver on its AI promises.
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