From wool sneakers to GPUs: Allbirds’ desperate AI pivot and 600% stock surge, explained

Many companies, from Walmart to United Airlines, have been heavily touting their use of artificial intelligence to get some more love from Wall Street during this AI boom—and some have successfully boosted their stock’s value. Now Allbirds has joined the fray: The shoe company announced on Wednesday it would reinvent itself as an AI computing infrastructure company, despite having no history whatsoever there. Investors bit, driving shares up 600% in afternoon trading.

Allbirds, maker of the once wildly popular wool sneakers favored by the Silicon Valley cognoscenti, announced recently that it was selling itself to a brand management company, American Exchange Group, for $39 million, about 1% of its 2021 peak market capitalization. It gave no indication at the time, however, that such a dramatic pivot was in the works.

On Wednesday, the company announced that it had secured $50 million in financing to turn itself into a tech company with a “long-term vision to become a fully integrated GPU-as-a-service (GPUaaS) and AI-native clo...