San Francisco-based Allbirds Inc., the once high-flying wool sneaker maker that was valued at more than $4 billion at its peak, announced a dramatic last-minute shift to artificial intelligence (AI) infrastructure just days before a potential shutdown.

This move sparked a sharp rally in a market highly sensitive to AI-related developments, with the company’s shares surging 582% by the close of trading on Wednesday after climbing as much as 875% intraday. The jump followed the company’s rebranding as an AI-focused business. 

Newbird AI

As part of the overhaul, Allbirds said it would divest all footwear and brand assets and adopt a new identity, Newbird AI. The company also plans to use a $50 million convertible financing facility to acquire high-performance GPU assets. 

“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in a statement. “Newbird AI is being built to help close that gap.” 

Market reaction

The sharp market reaction underscores the ongoing speculative enthusiasm surrounding artificial intelligence, which has driven aggressive buying in companies seen as AI beneficiaries while triggering swift selloffs in sectors viewed as vulnerable to disruption. 

Under its revised strategy, Allbirds aims to position itself as a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider over the long term. 

Allbirds went public in 2021 during a period of speculative investing fueled by near-zero interest rates. However, its stock has declined every year since listing. By Tuesday, the company’s market capitalisation had fallen to around $22 million. 

The company has been closing most of its physical stores in recent months amid weak demand and a broader shift toward online partnerships. Last month, Allbirds said it had sold its brand and footwear assets to American Exchange Group for $39 million. 

Wednesday’s rally partially reversed those losses, lifting the company’s valuation to nearly $150 million by the market close.