Allbirds, the shoe brand that closed brick-and-mortars earlier this year, is making a hard pivot into artificial intelligence, surging its stock price.
On Wednesday, April 15, Allbirds, Inc. announced it is leaving shoes behind for “AI compute infrastructure.” The company anticipates a name change to NewBird AI.
The announcement comes after Allbirds agreed to sell its brand and footwear assets to American Exchange Group, which owns brands like Born Concept, Ed Hardy, Mudd and NatureWell, in March. The brand shared in January that it was closing all of its full-price stores in the U.S. by the end of February, dedicating its efforts to online sales.
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Following the April 15 announcement, Allbirds’ stock skyrocketed, with a more than 600% increase. Per the Nasdaq Composite, on Tuesday, April 14, Allbirds’ stock was available for less than $3 a share, peaking at nearly $22 a share at 12:30 a.m. ET.
To make the switch, Allbirds received a $50 million convertible financing facility, a type of loan that allows lenders to convert debt into equity later.
Initially, NewBird AI will use funding from the loan to acquire “high-performance GPU assets, which will be deployed to serve customers requiring dedicated access to AI compute capacity,” a news release states. Essentially, NewBird AI will help provide more structure for artificial intelligence usage.
Over time, the company hopes to grow a neocloud platform, a type of computing software specialized in high-performance AI, as outlined by technology company Cisco.
The change from shoes to AI is subject to stockholder approval, which will be discussed during a meeting in mid-May, the Allbirds news release states.
Allbirds’ announcement states that the $50 million loan “will enable the company to pivot its business to AI compute infrastructure.” USA TODAY reached out to Allbirds for more information about the future of its shoe brand.
Greta Cross is a national trending reporter at USA TODAY. Story idea? Email her at [email protected].
This article originally appeared on USA TODAY: Allbirds announces hard pivot from shoes to AI; stock price soars
