Shoe company Allbirds was down 99% from its $4 billion peak valuation in 2021, doomed for the dustbin. In a last ditch, it’s selling the scraps and entertaining a new business vertical: AI.
No, it’s not April Fool’s Day. This morning, the ailing firm announced it sold its “intellectual property and other assets” to a brand management company called American Exchange Group in a $39 million deal. That was nearly double the valuation that the microcap company was fetching on the open market before the announcement.
That means that Allbirds, at least as a standalone business, is no more. Rather than comfortable shoes, the aptly named NewBird AI will positioning itself a destination for “high-performance, low-latency AI compute hardware under long-term lease arrangements,” per a company statement.
It’s a last ditch, but at first glance, it’s sizing up as a popular one in the market. On Wednesday, Allbirds Inc stock rose more than 680%, going for a mere $2.56/sh to nearly $20/sh. It’s proof that the “AI boom” is still very much alive, even if a little outrageous.
Copying somebody else’s notes
NewBird AI’s fresh foray into AI is reheated nachoes; a copy paste of a business model popularized by CoreWeave, an AI “hyperscaler” which went public to great fanfare in 2025. The company had amassed billions in contracts for its hardware.
And soon, the microcaps and small caps took note, forking that model in hopes of gleaning similar results.
Ailing bitcoin miners like IREN, Core Scientific, and Applied Digital ripped the model; so too did the struggling Russian software company Yandex, which rebranded as Nebius.
Their valuations exploded, sizable contracts followed, and the model beget even more copycats (so many that now a shoe company is pivoting to AI).
It feels slapstick, but it obviously works — not just with businesses that need the compute, but among investors.
AI is back (for now)
Experts say that a massive volume of compute will be necessary to power and train artificial intelligence (AI). For the moment, if you are a company with your hands on the scarce compute required by tech companies, you will drum up excitement. You will make deals.
For a period of time, maybe because of the tenuous geopolitical climate, the AI boom appeared to be put on ice. NewBird’s biggest day in years proves that excitement is very much alive; the mania of the AI boom continues. The S&P 500just hit a fresh all-time high, even despite uncertainty around the Iran War and inflation.
It just goes to show that investors remain obsessed with pickaxe plays absorbing the excesses of the AI boom, even as excitement around current large language models (LLMs) is teetering towards discontent amid worries about cost, long-term payoff, adoption, and “nerfing” of top models.
Compute carrying capacity
At least for the moment though, investors don’t seem to be fretting problems. They are in a blissful state about everything, as if there isn’t a problem in the world.
It might just be that AI has become what crypto used to be to this market. Converting a struggling firm into a bitcoin or ethereum treasury, or perhaps even opening some sort of digital currency-oriented business used to confer similar pops in microcaps and small caps. It might just be the latest speculative fervor.
Perhaps the one consolation is that AI companies embracing this model, despite lacking a ‘trade secret’ aren’t just buying and holding digital currency. They hold productive assets which remain scarce, at least for the moment. And absent advances in efficiency that make redundant large volumes of compute, or perhaps an acceleration in the production of computing hardware, this is an edge.
But it’s also important to keep the context. Like crypto before, excitements and valuations did subside and many ‘zombie companies’ flopped. While that might not be the case here, if many more businesses identify the opportunity and copy the model, it begs the question how much room there is in the market for another hyperscaler.
After all, if a shoe company can do it… who can’t?