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Allbirds on Wednesday announced that the company will move from making sneakers to providing computer infrastructure artificial intelligence (AI).
The San Francisco-based company said it will enter into a $50 million revolving financing agreement with an institutional investor to begin acquiring graphics processing units (GPUs), which can be used train AI models.
The company also plans to rebrand itself as “NewBird AI” and eventually shift its focus to providing cloud computing capacity and AI services, though it did not provide more details about those plans.
Allbirds has closed many of its brick-and-mortar stores in recent months amid soft demand and the company's focus on online partnerships. The company said last month it had sold its apparel and footwear businesses to American Exchange Group for $39 million.
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Allbirds is moving away from shoes after selling its footwear product and is moving forward to focus on AI as it transitions to NewBird AI. (Victor J. Blue/Bloomberg via Getty Images)
“As a result of this transaction, the Allbirds brand and legacy will continue under the ownership of American Exchange Group for the benefit of all its customers, investors from the record date of profit will receive a special dividend, and investors who choose to continue holding NewBird AI stock will be invested in the growing business of computer AI,” the company said in a press release.
NewBird AI plans to use initial funding from financial agreement to find high-performance GPUs that will be used to provide dedicated access to customers' AI computing capacity.
In the long term, NewBird AI seeks to provide GPUs as a service and AI-powered cloud solutions to its customers, including the growth of its neocloud platform, while also exploring strategic operational opportunities. mergers and acquisitions.
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| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| BIRD | Company ALBIRDS INC | 10.91 | -6.08 |
-35.79% |
Allbirds stock soared on Wednesday following the announcement, it rose from a closing price of $2.49 a share from Tuesday to a recent high of $21.95 a share during Wednesday's trading session.
The stock pared some of its gains on Thursday and is trading around $12.30 a share, down 27.5% on the day but up 379% over the past five days. Despite that high, the stock is down more than 97% over the past five years.
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GPUs are used to train artificial intelligence (AI) models. (Stock)
The company's announcement described the opportunity it sees in the AI space, noting that “rising AI development and adoption has created an unprecedented demand for specialized, high-performance computing architecture that the market is struggling to meet. Global business spending on AI services and data center investment they are growing.”
“At the same time, lead times for GPU purchases are increasing for high-end hardware, data center vacancy rates in North America have reached historic lows, and the entire market's computing capacity coming online through 2026 is already fully committed. The result is a market where businesses, AI developers, and research organizations can't secure the computing resources they need to build, train, and run AI.”
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“NewBird AI was created to help close that gap. The company will initially seek to acquire high-performance, low-cost AI computing hardware and provide access under long-term lease agreements, to meet consumer demand that spot markets and hyperscalers cannot service reliably,” it added.
Reuters contributed to this report.
