Allbirds Is Pivoting to AI After Selling Its Shoe Business for $39M

Allbirds is making one of the strangest pivots of the year.

According to CNBC, the once high-flying sneaker company announced on Wednesday, April 15, that it is leaving the footwear business behind and rebranding itself as NewBird AI, a company focused on artificial intelligence compute infrastructure.

The company said it plans to raise up to $50 million in funding, with the deal expected to close during the second quarter of 2026. NewBird AI will use that money to acquire high-performance AI hardware and lease it to customers under long-term agreements.

“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,” it said in a statement.

The announcement marks a dramatic turn for a brand that, less than five years ago, was worth more than $4 billion and seemed to have Silicon Valley at its feet. Founded in 2015 by former pro soccer player Tim Brown and renewable materials expert Joey Zwillinger, Allbirds built its reputation on minimalist wool sneakers and sustainability.

The company’s original Wool Runner became a status symbol in tech circles, with everyone from Barack Obama to Leonardo DiCaprio embracing the brand. For much of the late 2010s, Allbirds sneakers became shorthand for a certain kind of Silicon Valley culture: understated, eco-conscious, and expensive.

But the company’s rise never translated into lasting momentum. After going public in 2021, Allbirds struggled with slowing sales, rising costs, and an increasingly crowded market. Between 2022 and 2025, revenue fell from $298 million to $152 million.

The company also ran into trouble after expanding too far beyond its core products, introducing apparel and performance gear that failed to catch on. A push into $250 wool jackets and $88 dresses ended with heavy discounting and millions of dollars in unsold inventory.

The unraveling accelerated this year. In January, Allbirds announced that it would close all of its full-price U.S. stores by the end of February. Last month, the company agreed to sell its intellectual property, inventory, and customer relationships to American Exchange Group for $39 million.

American Exchange, a brand management company, will continue to sell shoes and apparel under the Allbirds name even after the original company becomes NewBird AI.

The pivot also comes after years of turbulence on Wall Street. In 2024, Allbirds received a Nasdaq warning after its stock traded below $1 for more than 30 days. The company later completed a reverse stock split to maintain its listing. Right before the AI announcement, Allbirds had a market value of roughly $21 million.