Allbirds Shares Up 300% as Struggling Shoe Maker Pivots to AI

The abrupt shift from sustainable footwear to artificial intelligence underscores both the company’s deepening business challenges and the powerful pull of investor enthusiasm around AI, with Allbirds betting it can reinvent itself in a capital-intensive sector dominated by established players, even as questions linger over execution, funding and whether the pivot represents a durable strategy or a short-term bid to revive market interest

U.S. footwear retailer Allbirds says it will pivot to artificial intelligence infrastructure, sending its shares up more than 300% as investors reacted to the company’s shift away from its struggling core business.

The company said it plans to transition into AI compute, with a new entity expected to be called NewBird AI, according to a statement on its investor relations website.

Shares of Allbirds, which traded below $3 a day earlier, rose above $10 following the announcement, giving the small-cap company a sharp but volatile boost.

The company said it is seeking to raise up to $50 million in funding, with the deal expected to close in the second quarter of 2026.

“The Company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service,” the company said.

The pivot follows a deal announced last month to sell its intellectual property and other assets to American Exchange Group for $39 million. The brand management firm will continue to sell products under the Allbirds name.

Allbirds has been scaling back its retail footprint, closing all full-priced stores in February as part of efforts to cut costs.

Founded in 2015, the company gained popularity for its environmentally friendly footwear made from natural materials such as merino wool. It went public in 2021 but has since struggled with slowing demand, rising competition and higher customer acquisition costs.

Sales fell nearly 50% between 2022 and 2025, declining from $298 million to $152 million.

The shift into AI infrastructure comes as companies across sectors seek to tap into investor enthusiasm for artificial intelligence, which has surged since the launch of ChatGPT in 2022.

AI infrastructure remains capital-intensive and technically complex, dominated by companies such as Nvidia, which has benefited from strong demand for graphics processing units used in AI systems.

Market analysts note that struggling companies have historically pivoted toward high-growth sectors to revive investor interest, including during past surges in blockchain and cryptocurrency-related businesses.

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