Allbirds Inc. is putting footwear in its rearview mirror as its tech founders take a longer-term view of the technology landscape.
The sneaker brand is still selling its intellectual property and footwear assets to American Exchange Group, a brand management firm, for $39 million. But in its new life, the company known as Allbirds Inc. is changing course.
Allbirds said on Wednesday that it inked a definitive agreement with an unnamed institutional investor for a $50 million convertible financing facility to enable it to pivot its business to AI compute infrastructure. The aim over the long-term is to become a cloud-base service provider integrating GPU-as-a-Service (GPUaaS) and AI-native cloud solutions. Allbirds would also change its name to NewBird AI.
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Allbirds’ stock surged on the news to $19.45 in mid-day trading, but then gave up some ground to close Wednesday’s trading session at $16.99. Tuesday’s close was $2.49.
Allbirds said that the renamed New Bird AI also expects to use capital from the convertible financing facility to acquire high-performance GPU assets, and that over time as it grows its neocloud platform that it will evaluate strategic M&A opportunities.
Proxy materials filed with the Securities and Exchange Commission said conversion of the convertible facility is subject to shareholder approval at an upcoming virtual Special Meeting of Stockholders slated for May 18, 2026. The meeting will also serve as the venue for shareholder approval of the IP asset sale to American Exchange, representing all of Allbirds’ assets under Delaware law. The asset sale, if approved, will result in the issuance in the third quarter of 2026 of a special dividend to stockholders of record as of May 20, 2026.
The document also noted that stockholders who continue to own Class A common stock of the renamed NewBird AI will continue to hold Nasdaq-listed stock. Shareholders are also asked to approve a plan of dissolution in the event the NewBird AI board determines within 12 months of the special meeting that continuing to operate the business “is not viable or [not] in the best interests of stockholders,” the proxy statement said.
Allbird’s ownership structure allowed its fashion-tech executives to hold a dual tier stock structure, essentially giving them control of the company and the voting ability to steer the company to its next big tech focus.
Company founders Tim Brown, a former New Zealand professional soccer player, and Joey Zwillinger, a biotech engineer, grabbed the market’s attention with its Wool Runner, a shoe crafted from merino wool and recycled plastic shoelaces and a proprietary sugarcane-based SweetFoam midsole that gave the shoe a lightweight and bouncy feel. But some missteps and lackluster earnings led to the brand’s eventual sale to American Exchange. A “substantial doubt” about the firm’s ability to continue as a going concern left it with few options and eventual sale to the brand management firm.
Allbirds said on Wednesday that its brand and legacy will continue under the ownership of American Exchange. As a brand management firm, the expectation is that American Exchange will license out the IP to licensees who will produce goods, with the Allbirds name slapped onto the items. Whether those products will continue to resonate with consumers will depend on who the licensees are and how well American Exchange can manage the course of the brand’s repositioning.
American Exchange did not respond to a request for comment.
The big questions are why do the shift and whether the pivot has a chance for success as the plan for NewBird AI essentially makes it a new start-up firm.
Steve Hochman, managing director and Americas partner at digital product engineering firm Nagarro, said the shift allows the publicly-traded company to raise money for a new business that is basically using “public seed money.” As for whether the new venture has a chance for success, that’s more a wait-and-see story.
“If you look at the probabilities attached to start-ups in general, the answer is usually not,” Hochman said. “Just one out of 10, one out of 100 start-ups hit escape velocity and head towards a billion dollar trajectory.” He said there are still a lot of open questions, and that in general new venture-backed start-ups tend to be inherently risky.
William Blair analyst Dylan Carden dropped coverage of Allbirds’ stock on Wednesday. “This is by any measure a Hail Mary,” Carden said of the proposed venture and the renaming of the firm to NewBird AI, noting as well the proposed allowance to give management the ability to dissolve the business within 12 months if the plan is not working. He added that the proposed $50 million investment is a “drop in the bucket in the broader neocloud market, where most companies run capex budgets well into the billions of dollars.”