Struggling shoe maker Allbirds announced it is exiting the footwear business and rebranding itself as an artificial intelligence company, a dramatic pivot intended to rescue a once-highflying label. Max Darrow reports from San Francisco.
Company executives say the business will transition to a new entity called NewBird AI and is supported by a private $50 million investment. The shift follows a recent sale of Allbirds’ intellectual property and shoe inventory for just under $40 million — moves that came after management warned shareholders last year the company was close to insolvency.
The market reaction was volatile. The stock spiked roughly 600% after the pivot was disclosed, reaching about $22 on Wednesday before sliding back to near $10 by Friday. Allbirds did not respond to requests for comment.
Not everyone is persuaded the gamble will work. Robert Stephens, founder of the Geek Squad tech-support service, labeled the plan a “Hail Mary” and criticized the lack of clarity about how the brand’s shoe-making past connects to its new AI direction. “There’s a piece missing here,” Stephens said, adding he expects interest to fade unless NewBird AI produces something tangible.
Shoppers and local customers expressed surprise and some bemusement at a shoe brand switching to AI. Others focused on the practical: they want assurance they can still buy the shoes they like. Allbirds still operates two U.S. brick-and-mortar stores: one near Boston and one near San Francisco.
At its peak, Allbirds was valued at roughly $4 billion. Now the company is attempting a rapid reinvention — moving from fashion on the ground to computing in the cloud. Key questions remain: What will NewBird AI actually build, how will it differentiate itself in an already crowded AI market, and will the financial bet pay off?
For now, the story is one of a bold, risky pivot: a familiar consumer brand abandoning its core product category to chase opportunities in artificial intelligence, backed by a fresh infusion of capital but facing skepticism from investors, industry figures, and customers alike.