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Allbirds, once beloved as the "sneakers of Silicon Valley," has decided to discontinue its footwear business and pivot to artificial intelligence (AI). On the day the company announced this new strategy, its stock price skyrocketed by a staggering 582%.

On April 15 (local time), international media outlets including The Guardian reported that Allbirds had unveiled a new business direction and would change its brand name to "Newbird AI." Upon this news, Allbirds’ stock surged by 582% during intraday trading.

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Allbirds was known for crafting sneakers exclusively from New Zealand merino wool, resulting in exceptional comfort. Notable figures known to wear Allbirds included former U.S. President Barack Obama and Hollywood star Leonardo DiCaprio. In particular, Allbirds became a favorite among Silicon Valley tech entrepreneurs, earning it the nickname "the sneakers of Silicon Valley."

Allbirds went public on the NASDAQ in 2021, raising 348 million dollars (approximately 510 billion won) and reaching a market capitalization of 4 billion dollars (about 5.9 trillion won). However, the company's performance plummeted thereafter. From its IPO through last year, Allbirds failed to post a single operating profit, with its cumulative net loss swelling to 419 million dollars (about 617.8 billion won). To make matters worse, sneaker sales sharply declined, forcing the closure of its last offline store.

A notice about the store closure is posted at the Allbirds store in Chicago, Illinois, USA. Photo by AFP Yonhap News

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New York Times article covering the bargain sale of Allbirds (left), Allbirds favored by former President Barack Obama. New York Times, Allbirds

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However, the global wave of investment in AI appears to have given Allbirds a once-in-a-lifetime opportunity. In its latest strategy announcement, Allbirds revealed it would focus on securing graphics processing units (GPUs) and providing computing infrastructure for AI companies.

The company plans to launch a so-called "GPU-As-a-Service" business, renting out GPU data centers used for AI training to tech firms. Allbirds stated, "The rise in AI development and adoption has created unprecedented demand for high-performance computing," adding, "Newbird AI aims to help bridge this gap."

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As a sneaker brand, Allbirds had focused on environmentally-friendly practices, including 100% sustainable production methods. However, it has been reported that Newbird AI has explicitly stated it will place less emphasis on the public good, such as environmental preservation.