- Allbirds turn to AI
- The new company is called NewBird AI
- It will sell AI GPU space, but why did Allbirds choose this path and what does it really mean?
I discovered Allbirds on TikTok. The social media platform may be a source of entertainment and information for some, but it is increasingly where I find tempting brands for products that I end up loving. Shoe and clothing maker Allbirds was one of them. Now, NewBird AI, an AI infrastructure company, is in a pivot that makes about as much sense as wrapping slices of bologna around your feet and calling them sandals.
As a loyal customer who once took his wife to the only New York City Allbirds store and convinced her to buy a pair of $100 slip-ons, I watched in horror as the once high-flying viral shoe company narrowly avoided bankruptcy.
Up until a week ago, I was still receiving two or three promotional Allbirds messages a month, and I would have happily bought another one of their lightweight, extremely comfortable and, yes, washable shoes.
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I don’t know exactly where it went wrong with Allbirds, but now I know, and most of the rest of the world, where it’s going.
Early Wednesday, the company issued a press release reiterating that the Allbirds assets had been sold to American Exchange Group, which, according to the release, “intends to continue to build on Allbirds’ legacy and deliver compelling products to Allbirds’ customers.” It sounds like this means the shoe brand AllBirds will continue. But the rest of the release is a business-jargon-filled word salad.
Although they sold the assets, there are still remnants of the Allbirds company, which trades publicly on NASDAQ. That company apparently secured $50 million in funding “to pivot its business into AI computing infrastructure.”
And the long-term vision is to sell AI GPU space or cycles as a service, which it calls “GPU aaS”. Oh, and the new name is NewBird AI.
Look, I have no problem with this business concept. Demand for GPU access for AI model building and rapid processing is at an all-time high. Smaller companies might want something like an AWS for AI to rent out cycles to their small to medium businesses. Such a service allows the smaller players to appear as the bigger ones to their customers. If they want an AI chatbot on their side, they might rent bikes from NewBird AI.
What I don’t understand is what this has to do with shoes. AllBirds sells stylish, well-made shoes and sneakers. It was an excellent online retailer, at least from this customer’s point of view. See, I was so excited when I got my first pair that I did a TikTok unboxing.
You could argue that everything in life is now connected to AI. There’s no reason Allbirds…I mean NewBird AI…can’t be plugged in too. i think What I really think though is that this is a craven attention game. AllBird’s business is pretty much dead (maybe), but the brand has a profile. NewBird AI’s financiers clearly believe there is enormous but temporary value in the name.
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Oddly enough, investors do too. News of the pivot sent AllBird’s stock soaring. In the morning it was under two dollars. By afternoon it was trading at over $20 a share. stock. I don’t know what that says about the overall intelligence of the average investor. Do they think the bizarre cross between a former shoe brand and AI is a winning combination?
As I said, there is some value in the idea, but no reason to associate it with the brand in any way. And what about Allbirds? I visited the site and launched the live chat where I found a sales assistant named Sophie (who was possibly AI).
I wrote: “What’s this I hear about you switching to AI?”
Sophie: “Hi! This is Sophie from Allbirds, thanks for reaching out! 😊 Could you share a bit more about what you’ve heard about us ‘pivoting to AI’? I’m here to help with any Allbirds related questions you have.”
Me: “I’ve been told you’re rebranding as NewBird AI and will be selling AI services. Will you still be selling shoes too?”
Sophie: “I’m here to help with Allbird’s shoes, orders, or services. Is there anything specific I can help you with today?”
Knowing that Sophie wasn’t going to answer me about the New Bird AI, I moved on to find out if they still planned to ship shoes next week.
Sophie: “Yes – Allbirds are still selling and shipping shoes so you should be able to place an order next week.”
Actually, Sophie was cool with me and waited even longer, like a month.
Sophie: “Yeah – that should be fine. Allbirds still sells and ships shoes, so you can wait until next month if you want.”
This makes some sense because the former Allbirds sold its assets to American Exchange Group, which owns fashion brands such as Aerosoles, Alexis Bendel and Ed Hardy. So maybe my once favorite shoe brand (sort of for Hey Dude now) can live on under its ample umbrella of fashion and products.
As for NewBird AI, it seems the new company capitalized on the old AllBirds trade name just long enough to get a boatload of seed capital from the exchange. NewBird AI is ultimately a soulless company that ultimately bears no relation to the Allbirds legacy.
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