Allbirds sells sneaker business, rebrands as NewBird AI for compute push

Allbirds is trying to turn a collapsing sneaker story into an AI infrastructure story, and the market rewarded the pivot with a share surge of about 582% on Wednesday, pushing the company above $17 even though its value had been about $21 million at Tuesday’s close. The company said it will rename itself NewBird AI and shift from footwear into high-performance, low-latency compute hardware that it plans to lease to customers.

The move is built on financing and a fire sale of the old business. Allbirds said it has a definitive agreement with an unnamed institutional investor for up to $50 million, with the financing expected to close in the second quarter of 2026 if stockholders approve it at a special meeting anticipated for May 18. The company also signed a March 30 agreement to sell its intellectual property and certain other assets and liabilities to American Exchange Group for an estimated $39 million. American Exchange Group said it will keep selling products under the Allbirds brand, and stockholders of record as of May 20 are expected to receive a special dividend if the transaction is approved.

The collapse behind the pivot is stark. Founded in 2015 by Tim Brown and Joey Zwillinger, Allbirds built a reputation around sustainable materials such as merino wool and became a Silicon Valley favorite, worn by tech executives and movie stars. The company went public in 2021, when it was valued at more than $4 billion at its peak. By 2025, annual sales had fallen to about $152 million from $298 million in 2022, and Allbirds closed all of its U.S. full-priced stores in February 2026.

That makes the AI shift less a transformation than a test of investor appetite for any company that can attach itself to the artificial intelligence trade. Allbirds said it wants to serve demand that spot markets and hyperscalers are not reliably meeting, targeting enterprises, AI developers and research organizations with leased compute access. The company is also asking shareholders to remove references to its public benefit mission, signaling a clean break from the environmental identity that once defined the brand.

Industry reaction has been skeptical. Bill Kleyman, an AI infrastructure expert, said the move from shoes into AI infrastructure is “not a very natural adjacency.” Neil Saunders, a retail analyst, said Allbirds is effectively using the shell of its former business to generate capital and create a new AI-focused venture, which may give some investors and employees a new lease on life. For everyone else, the surge raises a harder question: whether public markets are now buying a business, or just a narrative.