The NZ-founded company that once sold Silicon Valley its favourite sneaker is now trying to sell it computing power, writes Catherine McGregor in today\u2019s excerpt from The Bulletin.<\/p>\n
To receive The Bulletin in full each weekday,\u00a0sign up here<\/a>.<\/p>\n From wool to silicon<\/p>\n A shoe company with no background in technology is pivoting to artificial intelligence. Allbirds \u2013 the NZ-born sneaker brand co-founded by former All White Tim Brown in 2015 \u2013 announced yesterday it would rebrand as NewBird AI and use US$50 million in new investment to buy graphics processing units (GPUs), the powerful chips at the heart of the AI boom. The plan is to lease that computing power out to companies struggling to access AI infrastructure, positioning the company as a \u201cGPU-as-a-service provider\u201d.<\/p>\n The announcement came just weeks after Allbirds sold its intellectual property and assets for a mere US$39 million \u2013 less than 1% of its peak US$4 billion valuation. As the\u00a0New York Times\u2019 Livia Albeck-Ripka<\/a>\u00a0reports, investors responded with immediate enthusiasm: Allbirds stock surged more than 700% on the news, from around US$3 a share to over US$21, establishing itself as the market\u2019s new meme-stock du jour.<\/p>\n \u2018A hail Mary\u2019<\/p>\n The pivot has triggered reactions ranging from bafflement to alarm. \u201cAt first it read like a really well-executed April Fools\u2019 joke\u201d, AI infrastructure expert Bill Kleyman told the NYT. \u201cEvery company wants to be an AI company\u2026. The underlying business is struggling; AI presents itself as a compelling narrative reset, and off we go.\u201d\u00a0Investment firm William Blair dropped its coverage of Allbirds entirely<\/a>, calling the plan \u201cby any measure a Hail Mary\u201d and flagging \u201cdeep uncertainty\u201d around the GPU pivot. Bloomberg TV called it \u201cthe most 2026 move ever\u201d. Business Insider ran a piece rounding up\u00a0the best social media jokes about the news<\/a>\u00a0\u2013 none of which, sad to say, are actually funny.<\/p>\n Not everyone was so sceptical. New Zealand futurist Paul Spain told\u00a0RNZ\u2019s Corin Dann<\/a>\u00a0NewBird AI faced an uphill challenge, given the cost of accessing computing power from giants like Amazon, Microsoft and Google. But there were \u201cgood people at Allbirds\u201d, Spain said, and while it wouldn\u2019t be easy, they \u201cmight be able to make it work\u201d.<\/p>\n A fall from grace<\/p>\n In February,\u00a0The Spinoff\u2019s Emma Gleason<\/a>\u00a0traced the arc of Allbirds\u2019 spectacular rise and fall. From a 2014 Kickstarter campaign that reached its target in five days, Allbirds grew into a cultural phenomenon,\u00a0worn by Barack Obama, Oprah Winfrey and, as recently as Waitangi Day this year, Chris Hipkins. At its IPO in 2021, Allbirds was valued at US$3.52 billion. But the company never turned a profit. After going public, it expanded aggressively into brick-and-mortar stores and television advertising, betting it could find a market beyond its Silicon Valley bubble. It couldn\u2019t. Revenue peaked at US$297 million in 2022, then fell sharply. By 2024, its market cap had crashed to US$4.5 million \u2013 a fall of 97%.<\/p>\n Earlier this year the company closed all remaining full-priced US stores. As part of the AI rebrand, shareholders are being asked to approve the removal of all \u201creferences to the company being operated for the environmental conservation public benefit\u201d from its founding documents \u2013 a poignant coda for a brand that until recently promised \u201csustainability in every step\u201d.<\/p>\n The crypto pivot<\/p>\n Allbirds is not the first struggling company to try reinventing itself by going all-in on that year\u2019s most hyped tech \u2013 nor the first with a New Zealand connection. As\u00a0The Register\u2019s Matt Rosoff<\/a>\u00a0recalls, in December 2017, American soft drinks company changed its name from Long Island Iced Tea Corp to Long Blockchain, despite having no background in technology or crypto. Its shares more than tripled, giving the tiny firm a market cap of over $90 million. The bubble burst, of course: the SEC delisted Long Blockchain in February 2021 and charged three people connected with the company with insider trading. One of those people? Former NZ rich-lister Eric Watson,\u00a0who stands accused<\/a>\u00a0of passing to a friend non-public information about the impending business pivot, just before the company\u2019s stock price skyrocketed.<\/p>\n