AI this and AI that — it seems like every company is jumping into artificial intelligence, but the latest company to take the plunge has left some scratching their heads. Allbirds, the shoe company focused on older consumers, announced it was breaking into the industry after shedding its footwear wings in March.
The surprise pivot sent the company’s stock soaring by more than 600% Wednesday afternoon, with shares trading at more than $19. The company also announced it was changing its name to NewBird AI, keeping with its avian theme.
But don’t expect a new AI chatbot with an interesting bird name to start rolling out on the App Store, because that’s not what the company intends to do. Instead, the company said it would become a GPU-as-a-service and AI-native cloud provider.
Why is Allbirds making the switch?
In its press release, the company said it received a $50 million financing facility, which is business jargon for a flexible loan arrangement that allows Allbirds to jump into the market. It said it expects to close the deal sometime in the second quarter.
The company plans to use its new cash to purchase GPU servers, which they can then rent out to customers — essentially leasing the computing power of their hardware to other companies.
In its statement, Allbirds pointed to major issues with AI infrastructure, as the speed of AI development and adoption has skyrocketed. Data companies are having a harder time getting their hands on high-power GPUs, with wait times as long as 52 weeks. Data centers are also at max capacity, meaning even if they could get more GPUs, they couldn’t fit them. Allbirds sees this as a great opportunity to enter a lucrative market that needs support.
“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,” the company wrote. “NewBird AI is being built to help close that gap.”
AI bubble fears not stopping growth
The heated debate over whether there is an AI financial bubble isn’t stopping Allbirds or the multitude of other companies hopping into the field.
Some analysts believe that massive spending by companies and even governments on new AI technology is creating a bubble. They caution that this level of investment is unlikely to sustain the current rate of earnings growth it is fueling. But that money keeps flowing in.
AI-related capital investment passed the U.S. consumer as the primary driver of economic growth in the first half of last year, according to Yale Insights. The figure is quite large for a technology that is still far behind what its inventors have promised, but experts say people are looking at it the wrong way.
“Many companies have invested in AI like it’s a product, not a capability, expecting they could flip a switch to unlock immediate value,” Andrew Frawley, CEO of Data Axle, told Forbes in 2025. “But AI doesn’t operate in a vacuum. It’s a high-performance engine and too many are trying to run it on dirty fuel.”