As it turns out, all it takes to turn a cash-bleeding company into the New York Stock Exchange’s latest obsession are three magic words: “pivot to AI.”
In a baffling announcement today, struggling tech bro shoe company Allbirds said that it was closing a $50 million deal that “will enable the Company to pivot its business to AI compute infrastructure” — under the new name, “NewBird AI,” of course.
Put simply, the company is planning to buy extremely-hard-to-obtain AI chips and rent computing power to tech startups as a “fully integrated GPU-as-a-Service.”
To call it a reinvention would be an understatement. A mere two weeks ago, the company held a fire sale for all of its intellectual property and other assets, shutting down its footwear business for just $39 million. That’s a long cry from its once lofty $4 billion market cap only five years ago.
Its promise to jump on the AI gravy train, however, has seemingly left its ruinous financials in the rearview mirror. Allbird’s shares skyrocketed by more than 700 percent following its announcement today before stabilizing at around $17, up from less than $7 when trading began this morning.
The head-spinning turnaround illustrates an already-familiar story. The AI industry continues to pour tens of billions of dollars into AI infrastructure, despite having little evidence of being on a road to profitability, further stoking persistent fears over an AI bubble.
“If you don’t believe we are in a bubble you are in denial,” AI skeptic Ed Zitron wrote in a post in response to Allbirds’ stock market boost.
Business fundamentals have taken a backseat as investors restlessly chase the next big opportunity. As Allbirds’ meteoric rise from the ashes illustrates, the stock market has little interest in reality, choosing to believe that a failing shoe company will be able to “acquire high-performance, low-latency AI compute hardware” to fill a market gap for desperate AI companies.
Access to compute has turned into a bragging right among industry leaders, with OpenAI recently claiming it had far more ambitious plans to bring tens of gigawatts worth of compute — enough to power millions of US households — online by the end of the decade, compared to its rival, Anthropic.
Netizens were bewildered by the latest pivot, resulting in plenty of mockery on social media.
“I like my Allbirds,” Mother Jones journalist and MSNBC correspondent David Corn joked in a post on Bluesky. “I just don’t need for them to predict stock market trends for me.”
“Nothing says ‘America is Back Baby!’ like ‘Allbirds became an AI hardware middleman because they wanted to pump their stock instead of going into bankruptcy, so they said they will find some computer chips somewhere, but can no longer sell shoes,’” The Onion CEO Ben Collins wrote.
More on the AI bubble: You’ll Snort-Laugh When You Learn How Much AI Actually Added to the US Economy Last Year
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