- Allbirds is pivoting towards AI
- The new company is called NewBird AI
- It will sell GPU space with AI, but why did Allbirds choose this path and what does it really mean?
I discovered Allbirds on TikTok. The social media platform may be a source of entertainment and information for some, but it is increasingly where I find tempting brands for products I end up loving. Footwear and clothing manufacturer Allbirds was one of them. Now it’s NewBird AI, an AI infrastructure company, in a pivot that makes about as much sense as wrapping slices of bologna around your feet and calling them sandals.
As a loyal customer who once took his wife to New York City’s only Allbirds store and convinced her to buy a pair of $100 slip-ons, I watched in dismay as the once-hugely successful shoe company narrowly avoided bankruptcy.
Until a week ago, I was still receiving two or three promotional text messages from Allbirds a month and would have happily purchased another of their lightweight, extremely comfortable and, yes, washable shoes.
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I don’t know exactly where things went wrong with Allbirds, but now I, and most of the rest of the world, know where it’s headed.
Early Wednesday, the company issued a press release reiterating that Allbirds’ assets had been sold to American Exchange Group, which, according to the release, “intends to continue building on Allbirds’ legacy and offering compelling products to Allbirds customers.” That seems to mean that the AllBirds shoe brand will continue. But the rest of the statement is a word salad full of business jargon.
Although they sold the assets, vestiges of the Nasdaq-listed Allbirds company remain. That company reportedly secured $50 million in funding “to pivot its business toward AI computing infrastructure.”
And the long-term vision is to sell AI GPU space or cycles as a service, what it calls “GPU aaS.” Oh, and the new name is NewBird AI.
Look, I have no problem with this business concept. Demand for GPU access for AI modeling and fast processing is at an all-time high. Smaller businesses may want something like an AWS for AI to rent cycles for their small and medium-sized businesses. A service of this type allows the smallest actors to appear as the largest to their clients. If they want an AI chatbot on their site, maybe rent cycles from NewBird AI.
What I don’t understand is what this has to do with shoes. AllBirds sells stylish, well-made shoes and sneakers. It was a great online retailer, at least from this customer’s point of view. Look, I was so excited when I bought my first pair that I did a TikTok unboxing.
You could argue that everything in life is now connected to AI. There’s no reason why Allbirds… I mean, NewBird AI… can’t connect too. I guess. However, what I really believe is that this is a cowardly attention game. AllBirds’ business is all but dead (maybe), but the brand has a profile. NewBird AI’s funders clearly think the name has enormous, if temporary, value.
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Interestingly, so do investors. News of the pivot sent AllBirds stock soaring. In the morning it cost less than two dollars. By afternoon, it was trading at more than $20 a share. I don’t know what that says about the general intelligence of the average investor. Do you think the strange intersection of an old shoe brand and AI is a winning combination?
As I said, the idea has some value, but there is no reason to associate it with the brand in any way. And what about Allbirds? I visited the site and opened the live chat, where I found a sales assistant named Sophie (who may have been AI).
I wrote, “What’s that I heard about you going into AI?”
Sofia: “Hi! I’m Sophie from Allbirds, thanks for reaching out! 😊 Could you share a little more about what you’ve heard about our ‘pivot to AI’? I’m here to help you with any Allbirds-related questions you have.”
Me: “They told me that they will rename it NewBird AI and that it will sell AI services. Will it still sell shoes too?”
Sofia: “I’m here to help with Allbirds shoes, orders or services. Is there anything specific I can help you with today?”
Since I knew Sophie wouldn’t get back to me about New Bird AI, I decided to find out if they were still planning to ship shoes next week.
Sofia: “Yes, Allbirds is still selling and shipping shoes, so you should be able to place an order next week.”
In fact, Sophie was fine with him waiting even longer, like a month.
Sofia: “Yeah, that should be fine. Allbirds is still selling and shipping shoes, so you can wait until next month if you want.”
This makes some sense, because the former Allbirds sold their assets to American Exchange Group, owner of fashion brands such as Aerosoles, Alexis Bendel and Ed Hardy. So maybe my once-favorite shoe brand (he now likes Hey Dude) can survive under its broad umbrella of fashion and products.
As for NewBird AI, it appears that the new company leveraged the old AllBirds brand long enough to generate a lot of seed capital on the stock market. NewBird AI is, in the end, a barebones company that ultimately bears no relation to Allbirds’ legacy.
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