Minimalist sneaker company Allbirds has been floundering for a while now. Because the brand stereotypically catered to the Silicon Valley crowd, it feels on-brand for the creators of the "Salesforce Ones" to transition into "AI compute infrastructure," rebranded as "NewBird AI," per a press release on April 15th. Once a 4 billion dollar company, Allbirds went public in 2021 and sold for just $39 million to American Exchange Group, owner of over a dozen brands such as Jonathan Adler, Ed Hardy, and Aerosoles. Joe Vernachio, ex-Nike executive and outdoor apparel veteran, remains CEO of the company, but leadership may be shifting. This isn't just a brand pivot, it's a study on customer trust.
While this may be a calculated move coming from a public company, it might be a short-lived success due to Allbirds' lack of customer listening. This past January, Allbirds closed its brick-and-mortar locations as customers began noticing a sharp decline in quality. A large part of the appeal of the nondescript sneakers made with sugarcane and tree fiber was the sustainability factor– which is now shifting. According to a recent SEC filing, the footwear brand is removing all references to operating as an "environmental conservation public benefit" under the American Exchange Group, further illustrating how initial priorities have changed. But this isn't just a shift in strategy, it's a clear break in brand identity. While their commitment to environmentalism once set them apart, Allbirds is distancing itself from its founding status as a certified B Corp and Delaware Public Benefit Corporation.
A failing sneaker brand leveraging itself as a public company to become an AI platform is surprising, but perhaps the shock value contributed to $BIRD's stock price soaring to 400-800% on Wednesday, April 15th. Critics of the shift call the move desperate, because while Allbirds' audience may be "tech bros," its founders certainly are not. NewBird AI's aspiration to evolve into a AI-native cloud solutions provider, dubbed a "neocloud" platform, comes at a time where alternatives to cloud giants are rising in popularity, especially for AI workloads. Those in favor of the shift claim that NewBird AI is capitalizing on a red-hot sector, as the artificial intelligence buzzword carries substantial weight for investors. Graphics Processing Units (GPUs), complex data processing chips, are becoming harder to manufacture and procure, and prices of these units are rising, with proponents claiming now is a great time to get in on AI.
Still, the abrupt transition coupled with the early stock boon paints a picture quite reminiscent of what we've seen across CX and contact center AI in recent years. Hype, mystique, and lofty promises have measurable effects on the market, but that often has little bearing on whether a product will actually deliver. It's possible, of course, that these former shoe executives will have a fresh perspective to bring to the cloud computing space, but it's more likely that pivoting into an industry with limited precedent and high technical opacity may be nothing more than a procedural lifeline for a failed sneaker business.
BIRD stock will be interesting to watch, and fluctuations have already begun just a few days after the announcement. Despite the initial spike, Allbirds stock has already come back down to Earth. It begs the question, are massive investments in AI here to stay? Or will they prove to be a trend as fleeting as wool sneakers? If Gen Z customers have anything to say about it, the bubble may be popping sooner than anticipated. As the consumers that brands should be watching now in order to inform the future, it's worth noting that much of an entire generation remains skeptical about the benefits of artificial intelligence. Is this going to pan out as a cautionary tale? Can once-sustainability focused sneakerheads run a GPU-as-a-Service? Let me know your take at london.whiting@cmpteam.com.