Eco-friendly footwear maker Allbirds announced a sharp business pivot toward AI infrastructure on Wednesday. The company raised $50 million through convertible financing to fund this transition.
To do this, Allbirds entered into an agreement with an institutional investor and effectively abandoned its core business. Now, the company plans to develop a GPU-as-a-Service model and work in the field of cloud AI solutions.
At the same time, Allbirds agreed to sell its brand and entire footwear business to American Exchange Group for $39 million. This is a company that manages brands in the accessories segment.
After the deal, Allbirds plans to change its name to NewBird AI and focus on providing computing power for AI.
Investors clearly appreciated this turn of events.
The company's stock BIRD rose more than 400% after the market opened, reaching $12.72 at one point. Currently, shares are trading around $10.97, which is about a 340% increase. These are the highest levels since July of last year.
According to the company, NewBird AI plans to use the funds raised to purchase high-performance GPUs. These resources will be used for clients who need constant access to AI computing.
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The company clarified that it is betting on equipment with high performance and minimal latency. Access to these resources will be provided through long-term contracts. This should meet demand that neither spot markets nor major cloud providers can currently satisfy.
The convertible financing deal is expected to close in the second quarter of 2026.
Also, Allbirds has scheduled an extraordinary shareholders meeting for May 18. Those who held shares as of April 13 will be able to participate.
In addition, the company expects to pay special dividends in the third quarter of 2026. Shareholders registered as of May 20 will receive them.
This pivot comes amid serious financial problems. The market capitalization of Allbirds recently dropped to about $21 million, even though the company was once considered a “unicorn.”
As recently as Tuesday, shares closed at $2.49, having lost more than 60% over the past six months.
The company was actively burning cash. Over the past 12 months the negative free cash flow was $58.23 million. Investment bank Chardan, which is organizing the deal, structured it to give the company quick liquidity while allowing investors to profit from conversion.
The growing demand for AI computing has already forced a number of mining companies to switch to high-performance computing. But Allbirds did not initially have such infrastructure.
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This move unintentionally recalls the story from 2017, when a beverage maker changed direction and became Long Blockchain Corp. Back then, shares also soared.
But it ended badly.
Ultimately, the company was delisted from Nasdaq, and later the SEC removed it from the market entirely. Three people connected to the case were later charged with insider trading, also by the SEC.
Why the Market Reacted So Sharply
Investor reaction to the news seems almost irrational, but there is a clear logic behind it. The market is now extremely sensitive to the AI theme, and any company that tries to get into this trend immediately gets attention.
In the case of Allbirds , the effect is amplified by the fact that this is essentially a “dead” brand with a very low base. When a company with a capitalization of about $20 million announces a move into a hot sector, even a small inflow of money can drive the price up many times. Here, it's not just belief in the future business at play, but also plain speculation.
Plus, the format of the deal itself plays a role. Convertible financing gives investors the opportunity to get in early and get upside if the AI story really takes off. For the market, this is a signal that someone is already willing to bet on the transformation, which means others have a reason to join in.
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But there is an important point that many ignore.
Allbirds is not just changing direction, but is essentially starting from scratch. The company has neither its own computing infrastructure nor experience working with AI, nor a position in this market. Unlike miners who already had data centers and equipment, here everything will have to be built from the ground up.
This makes the current growth look more like a bet on an idea than an assessment of a real business.
At the same time, the market has already seen similar stories. During previous hype cycles, companies massively “rebranded” into trendy sectors, whether blockchain or metaverses. At first, this was almost always accompanied by a sharp rise in shares, but not all such transformations ended in success.
