When Allbirds pivoted to AI in April, it felt like a joke from \u201cSilicon Valley\u201d breaking free of the TV: The direct-to-consumer shoe purveyor whose flimsy kicks helped define what we\u2019ll loosely call \u201cSilicon Valley style\u201d had discovered a new trend to chase.<\/p>\n
The move was right out of the meme stock playbook written by GameStop: Take a troubled public company, latch on to the hottest fad, and reap the rewards of a rising stock price as retail investors pile in.<\/p>\n
Well, it worked. The company sold its shoe business for $43 million, raised another $100 million from the stock market, and now it\u2019s called Smartbird.<\/p>\n
Now Nadia Carlsten has to make it work. A former AWS executive with an engineering PhD, Carlsten most recently led the European compute company DCAI before she began yesterday as Smartbird\u2019s CEO.<\/p>\n
\u201cWe\u2019re going to be recruiting a brand-new team for the AI business, and we\u2019re going to be getting an office,\u201d Carlsten told TechCrunch from Amsterdam. \u201cThe shoe business has officially closed as of yesterday, so that\u2019s all done\u00a0\u2026 The first task that I\u2019m tackling right now is rounding up the leadership team, looking for somebody to lead infrastructure operations, for example.\u201d<\/p>\n
Call it a startup with a sole founder and a very large seed round. What\u2019s next is less clear. <\/p>\n
Smartbird aims to be an AI infrastructure provider, latching on to the seemingly bottomless demand for compute to train and run deep learning models. But unlike neoclouds, which relentlessly arbitrage the price of chips against the cost of GPU time or inference tokens, Carlsten will be aiming at more carefully managed deployments. The ideal Smartbird customers need direct control over the servers running their models \u2014 typically for political or business-model reasons \u2014 and value data sovereignty over the scalability of the public cloud.<\/p>\n
Carlsten couldn\u2019t yet estimate the size of that market and argued that it was fairly nascent, since many companies are still just piloting AI tools. At DCAI, she worked with Novo Nordisk and other European firms that take a special interest in data sovereignty or operate bespoke models: \u201cWe certainly have anybody that\u2019s within the pharmaceutical industry, energy industry, financial, the public sector,\u201d she said.<\/p>\n
To Carlsten\u2019s view, that means Smartbird isn\u2019t competing with hyperscalers or neoclouds, but with internal company projects. Still, there are established companies in this space \u2014 Hewlett Packard offers a single-tenant managed AI compute service, as does Equinix, the data center giant.<\/p>\n
It\u2019s a real business model, but it\u2019s not clear if it has the same growth potential as the cloud services, where expansion is the be-all and end-all. Carlsten said she expects to have compute clusters deployed for several customers by the end of the year. Other startups, like the inference cloud General Compute, have bigger ambitions \u2014 the company announced<\/a> a $300 billion chip order when it came out of stealth last month.<\/p>\n Carlsten says she doesn\u2019t need big chip commitments to realize Smartbird\u2019s vision, because her potential customers needs sit in the range of hundreds to thousands of chips \u2014 it\u2019s \u201cnot about large scales and huge numbers of GPUs; they\u2019re more about agility of these clusters, and more about having control of the infrastructure stack.\u201d<\/p>\n Smartbird is also unlikely to compete with rivals on price, since cloud services go to great lengths to optimize chip usage 24 hours a day to offer the cheapest compute, though Carlsten suspects that companies with specialized workflows will be able to work more efficiently with their own servers.<\/p>\n Demand for AI infrastructure is a powerful force in the market, driving up the stock prices for chipmakers, cloud providers, and energy companies, even convincing investors that orbital data centers are a feasible idea. But Carlsten insists that Allbird\u2019s transition was carefully thought through. <\/p>\n \u201cIt wasn\u2019t, \u2018Let\u2019s just do AI, because it\u2019s AI, and it\u2019s hot,\u2019\u201d Carlsten, who will be paid a $700,000 annual salary and was awarded stock worth about $9 million to take the job, said. \u201cIt was really about, do we have a chance to build a business over time that is going to find this niche in the market and be able to grow over time?\u201d<\/p>\n When Allbirds pivoted, one thing that went by the wayside was its public benefit corporation (PBC) status, which had been intended to enshrine the sustainability commitments that were part of the shoe company\u2019s pitch. PBC charters are often used by companies to highlight non-financial promises. OpenAI, for example, is a PBC with a focus on AI safety. This change of direction, however, suggests PBCs are hardly ironclad.<\/p>\n Carlsten said that Smartbird\u2019s board made a long-term commitment to execute against her AI strategy.<\/p>\n \u201cThere are some companies out there chasing AI,\u201d she told TechCrunch, \u201cbut at the end of the day, what matters is, is there actual weight behind the chasing?\u201d<\/p>\n