In one of the most bizarre corporate pivots in recent memory, struggling shoe company Allbirds has announced it is abandoning its footwear business to chase the artificial intelligence boom — and investors are going wild. The company’s stock skyrocketed more than 700% on Wednesday, surging from under $3 per share to over $17. The tiny company, which had a market cap of just $21 million at Tuesday’s close, saw its shares explode after revealing the dramatic shift.
Allbirds said it is rebranding as NewBird AI and will now focus on building AI compute infrastructure. The plan is to buy high-performance, low-latency AI hardware and lease it out to customers who can’t get reliable access from big hyperscalers or spot markets. The company also announced it’s raising up to $50 million in new funding, with the deal expected to close in the second quarter of 2026.Just two weeks ago, Allbirds sold off its intellectual property and most of its assets to American Exchange Group for a mere $39 million. That buyer will continue selling shoes under the Allbirds name, while the original company walks away from the business entirely.
Allbirds had already been shutting down stores, closing all its full-priced U.S. locations back in February as sales continued to collapse.Once a Wall Street favorite, Allbirds went public in 2021 with a valuation topping $4 billion. Founded in 2015 by former soccer player Tim Brown and Joey Zwillinger, the brand made its name with comfortable, eco-friendly shoes made from natural materials like merino wool. It became especially popular among tech workers who loved the sustainability angle.
But the good times didn’t last. Changing fashion trends, rising competition, and high customer acquisition costs crushed the business. Sales dropped nearly 50% between 2022 and 2025, falling from $298 million to just $152 million. Now, like many struggling companies before it, Allbirds is trying to reinvent itself by jumping on the hottest trend in tech: AI. The strategy has worked in the short term — the stock is on fire — but building a successful AI infrastructure business is expensive, highly competitive, and far removed from selling sneakers. Whether this wild pivot actually saves the company remains to be seen. For now, though, investors are clearly excited about anything with “AI” in the name.
Allbirds Stocks Explode: Decoding the 700% Surge as Company Moves Towards AI
