The struggling shoe brand Allbirds announced it is exiting the footwear business and reinventing itself as an artificial-intelligence company, a dramatic pivot aimed at rescuing a once-highflying label. Max Darrow reports from San Francisco.
Executives say the company will transition to a new entity called NewBird AI and is backed by a private $50 million investment. The move follows a recent sale of Allbirds’ intellectual property and shoe collection for just under $40 million — steps that came after leadership told shareholders last year the company was on the brink of insolvency.
The announcement produced wild market reactions: the stock jumped roughly 600% after news of the pivot, hitting about $22 on Wednesday before plunging back to near $10 by Friday. Allbirds did not respond to requests for comment.
Not everyone is convinced. Robert Stephens, founder of the Geek Squad tech-support service, called the move a “Hail Mary” and criticized the lack of clarity about how the company’s shoe-making past connects to its new AI direction. “There’s a piece missing here,” Stephens said, noting he expects the story to fade unless the company delivers something tangible.
Shoppers and local customers were surprised by the news. Some expressed bemusement at a shoe brand switching to AI, while others said they just want to be sure they can still buy shoes they like — a reference to lingering retail footprint: two Allbirds brick-and-mortar stores remain in the U.S., one near Boston and one near San Francisco.
Allbirds was once valued at about $4 billion. Now the company is attempting a rapid reinvention, moving from fashion on the ground to computing in the cloud. The big questions remain what NewBird AI will build, how it will compete in an already crowded AI market, and whether the financial gamble will pay off.