Allbirds’ Radical Pivot to AI
What a crazy story! The US shoe manufacturer Allbirds announced yesterday that it is selling its shoe brand & business and is now investing in AI infrastructure. A complete turnaround of the whole company. It’s spending tens of millions on GPUs and has renamed itself “NewBird AI.” As a result, its stock price has skyrocketed by more than 600%.
For me, this is a warning sign regarding the hype around AI, though not a major one. The whole thing was only possible because the company had lost more than 95% of its value over the past few years and was therefore just a microcap with a market cap of less than $100 million. A few large orders can drive the price up very sharply in that situation.
Anyone who profited from this yesterday was either an insider or a hardcore Allbirds hodler. I suspect only a few fall into either of those categories. I’m watching this from the sidelines, this isn’t investing. I didn’t find the company interesting before, and I don’t find it interesting now either. Whether they can successfully establish this new business segment remains to be seen.