Allbirds Reinvents Itself as NewBird AI: A Bold Bet on AI

Allbirds Turns to AI to Avoid Insolvency

Allbirds, known for its eco-friendly shoes, is at a critical turning point in its history. Facing a concerning financial situation, the company is considering transforming itself into a major player in artificial intelligence. This radical change involves replacing its shoe stores with data centers, an ambitious project requiring substantial resources in terms of funding, expertise, and strategic partnerships. To succeed in this transition, Allbirds may also consider acquiring a company already well-established in the AI sector.

In November, the company revealed to its shareholders that it was close to insolvency. Allbirds is contemplating changing its name to NewBird AI as part of this transformation into an AI computing company. However, this pivot is far from straightforward. Allbirds currently lacks the financial resources and assets necessary to compete in a sector where competition is fierce. Industry experts emphasize that the company must overcome numerous obstacles to successfully reinvent itself. Notably, Allbirds did not respond to a request for comment for this article.

Need for Additional Funding

Recently, Allbirds sold its shoe business along with the associated intellectual property for $39 million. At the same time, it raised $50 million through a convertible note, funding intended for the purchase of graphics processing units, essential for training and deploying AI language models. Despite these efforts, Allbirds' total capital, which stands at around $90 million, remains insufficient compared to the massive investments required in this industry. Indeed, companies like CoreWeave, a leader in the neocloud space, plan to spend between $30 and $35 billion this year to expand their capacity. According to Warren Hosseinion, head of capital markets at GPU Compute Labs, managing institutional-level computing clusters can cost several hundred million dollars.

Moreover, by the end of 2025, Allbirds owned no warehouses or real estate assets, further complicating its ability to compete in the sector.

Finding Strategic Partners

To successfully pivot, Allbirds must quickly establish partnerships with tech giants such as Amazon, Google, Meta, or Microsoft. These collaborations could enable Allbirds to secure additional funding for GPU purchases. While CoreWeave has already paved the way with this model, Allbirds may face challenges in convincing these potential partners of its long-term commitment. Due diligence will be a significant hurdle to overcome, according to leaders in the AI industry.

Acquisition Strategy to Accelerate the Process

Another strategy for Allbirds would be to acquire a private company already active in the AI field. Darren Kimura, CEO of AI Squared, suggests that such an acquisition could allow Allbirds to go public and access capital from public markets. The recently raised $50 million could be sufficient to build a management team, acquire some chips, and begin demonstrating the viability of the model. This proof of concept could then be used to expand the business.

Recruiting AI Experts

To successfully carry out this transition, Allbirds must also recruit leaders with expertise in policy and energy, crucial areas for managing data centers. Paul Calatayud, founder of the AI data center developer VoltScape, emphasizes the importance of having a team capable of effectively managing these complex infrastructures. The current CEO of Allbirds, Joe Vernachio, who succeeded founder Joey Zwillinger in 2024, comes from the apparel industry, having previously led companies like Mountain Hardwear and The North Face. The CFO, Annie Mitchell, also has notable experience at Gymshark and Adidas. Both will receive retention bonuses if they stay until the completion of the sale of the shoe business, expected in the second quarter.