Allbirds Becomes NewBird in Pivot From Shoes to AI

Allbirds made a name for itself with its shoes fashioned from merino wool.

Now, it wants to be known as an AI company.

The retailer announced that pivot Wednesday (April 15), saying it had struck a deal to raise $50 million to help it transition its business to artificial intelligence (AI) compute infrastructure, with the long-term goal of becoming a “fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider.”

According to a news release, the company plans to rename itself “NewBird AI” in connection with this change. The company’s shoe business has been sold to American Exchange Group, “which intends to continue to build on Allbirds’ legacy,” per the release.

The release adds that while enterprise spending on AI services and data centers are on the rise,  North American data center vacancy rates are at historic lows, with market-wide compute capacity coming online through mid-2026 already spoken for.

“The result is a market where enterprises, AI developers, and research organizations are unable to secure the compute resources they need to build, train and run AI at scale,” according to the release.

“NewBird AI is being built to help close that gap. The company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service.”

The announcement comes a little less than three months after Allbirds decided to close the remainder of its full-price stores in the U.S. to focus on its eCommerce platform, wholesale partnerships and international distributorships.

“This is an important step for Allbirds, as we drive toward profitable growth under our turnaround strategy,” Allbirds CEO Joe Vernachio said in a news release at the time.

“We have been opportunistically reducing our brick-and-mortar portfolio over the past two years. By exiting these remaining unprofitable doors, we are taking actions to reduce costs and support the long-term health of the business.”

The company had 29 stores in the U.S. and two international locations in September of last year, down from a respective 45 and 15 two years earlier.

As PYMNTS wrote soon after that announcement, Allbirds is part of a larger group of direct to consumer (D2C) companies reducing their brick-and-mortar footprint amid rising costs.

“Physical retail brings rent, staffing, inventory management and buildout expenses that strain margins,” that report said.

“Returns add another layer of pressure, especially in apparel and footwear, where reverse logistics can erase the gains of an otherwise successful sale. As customer acquisition costs rise across digital channels, many D2C brands are discovering that operating dozens of locations amplifies risk rather than diversifying it.”