Footwear company Allbirds has secured a definitive agreement for a $50 million convertible financing facility from an institutional investor, which it says will support a strategic shift away from retail and reposition the business as an AI compute infrastructure provider.

The announcement sent the company’s shares up by more than 580 per cent, though the stock remains around 90 per cent below its November 2021 peak listing level.

The move follows a plan announced at the end of March to sell its brand and footwear assets to American Exchange Group for $39 million. The group will continue to operate the brand.

The core focus of the transformation is Allbirds’ rebrand to NewBird AI, with its main operations orienting around providing GPU-as-a-service and AI-native cloud solutions.

The company intends to use the financing facility to acquire high-performance GPU hardware, which it will lease to enterprises and developers seeking dedicated AI compute capacity, providing access in a market where supply remains constrained.

Rising AI development and adoption have created significant structural demand for specialised, high-performance compute, which Allbirds says the market is struggling to meet. The company points to increasing procurement lead times for high-end GPUs and record low vacancy rates at North American data centres. It also says that capacity expected to come online through mid-2026 is already fully committed.

As a result, enterprises, AI developers and research organisations are unable to
secure the compute resources required to build, train and run AI at scale.

Allbirds expects the transaction to complete in the second quarter of this year, subject to shareholder approval. A vote is scheduled for May. If approved, the company plans to issue a special dividend later in the year.

The strategic rebrand of the company, once valued at more than $4 billion, has drawn scrutiny from market watchers. US TV personality Jim Cramer branded the move “ridiculous”. Former Goldman Sachs investment manager Matt Levine and retail analyst Hitha Herzog have also suggested that the company’s new owners are leveraging enthusiasm around AI to reposition the business in a way that could align with meme stock dynamics.

Allbirds was founded in 2015 with a focus on natural materials, including merino wool, tree fibre and sugarcane. Its products attracted high-profile customers such as Ben Affleck, Oprah Winfrey and Barack Obama, while the company also became a darling of tech executives in Silicon Valley including Google co-founder Larry Page.

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