Hello reader.
From operating… to operating the AI infrastructure. Allbirds Company (bird) It’s leaving shoes and turning into an AI company.
When the company started in 2015, the idea was clear:
- Create comfortable, simple shoes using sustainable materials.
- Selling mostly direct to consumer via the Internet.
The brand saw great success in the late 2010s, especially in Silicon Valley, where it became known as the “uniform technology” shoe. Even prominent figures like Barack Obama have been seen wearing this sneaker.
The company expanded rapidly and later expanded into retail and apparel. The company was valued at $4 billion and went public in 2021, positioning itself as a leader in sustainable fashion.
But Allbirds, like all good things, has come to an end.
After going public, sales slowed, competition increased, and complaints about durability and pricing increased. The stock fell sharply and reached an all-time low just two years later.
In the past few years, Allbirds has been viewed as a struggling brand post-hype.
This brings us to today, where the company is trying to capitalize on the biggest “hype” movement out there: artificial intelligence.
The stock rose 600% on Wednesday’s news that the struggling sneaker company will become an AI infrastructure provider, offering GPU-based cloud services under the new name NewBird AI.
CNN Business wrote that the pivot “feels like 2026.”
Allbirds sold its core footwear business and raised nearly $50 million to enter the AI infrastructure market. The funds will allow it to purchase and develop graphics processing units (GPUs) that power AI models, which it will then loan to customers.
BIRD has been turmoil since mid-week over questions about whether the company has the capital or experience needed to compete in AI infrastructure…
And whether this reinvention aligns with the hype-driven pivots of the dot-com era.
per day Smart moneyLet’s take a look at why “if you can’t beat ’em, join ’em” is not a safe strategy for surviving a prevailing market trend.
Next, I’ll share a different shoe company I’m looking into instead.
History rhymes
When the Internet began to gain widespread attention, investors became obsessed with all things dot-com. Companies quickly realized that they could boost their stock prices simply by associating themselves with the burgeoning technology.
Many did this by adding “.com” to their names and advertising obscure Internet strategies. Stocks exploded on the hope that anything related to the web would be valuable.
But what happened is that investors pumped their money into companies with no profits, sometimes without real revenues, and sometimes without a final product.
Pets.com is the most famous example.
The company was an online pet supplies retailer in the late 1990s. It became hugely popular during the dot-com boom – and aired its famous “Sock Puppet” ad during Super Bowl XXXIV on January 30, 2000.
Ten months later, the company declared bankruptcy.
Because Pets.com sold heavy, low-cost goods—like dog food, which was expensive to ship—its business model never worked economically. I often spent more money acquiring customers and shipping these heavy items than I generated revenue. Embodying the entrepreneurial spirit of that era, Pets.com spent $17 million on marketing during its short time as a company… but generated only $8.8 million in revenue.
When the dot-com bubble burst, many of these hype-chasing stocks collapsed. Investors turned back to earnings, cash flows, and real business models.
The AI boom has already begun to create its own version of notorious flops like Pets.com.
AI rebranding and reality checking
Al Khawarizmi Holding Company (Reem) – Singing Machine Co. Previously – Implemented an AI pivot to capture market attention, similar to Allbirds.
Algorithm was originally an obscure consumer electronics company that sold karaoke machines. But the company was operating in a competitive, low-profit space with minimal growth and near-zero investor excitement.
Axle braid.
In September 2024, Algorithm announced that it would transition to an AI-driven logistics and computing platform. This extreme shift has stunned the markets. The stock rose, driven more by AI enthusiasm than fundamentals.
The company has continued to post annual losses in both 2024 and 2025, and its stock remains flat so far this year.
Like the hype chasers of the dot-com era, Algorithm came from a non-technology sector and saw a sharp rise in valuation after announcing a shift to artificial intelligence. This rise proved short-lived.
Allbirds will likely find itself on a similar path.
So, instead of waiting for shoes to drop, I look for a different shoemaker…
A tale of two shoe brands
Although both Birkenstock Holdings plc (Burke) Allbirds sells shoes that are simple, comfortable, economical, strategic and durable as a completely different business.
Birkenstock’s competitive rivalry is based on brand identity and reputational quality, rather than advertising spend. I avoided chasing trends.
Not only did its financial results for 2025 set a record, but it did so by a large margin. Volume growth, not price increases, was the driver of most of these strong results.
The company’s long-term core driver continues to move forward: strong revenue growth, a brand with a real moat, and a long runway of organic growth in both product and distribution.
To clearly state the differences: Birkenstock is a profitable, growing, brand-driven company. Allbirds, on the other hand, is a shrinking, unprofitable, trend-driven company.
Birkenstock also falls into the “AI Survivor” and “AI Applier” investment categories.
These are, respectively, the companies that AI can never replace… and those that it can’t is used Artificial intelligence to their advantage. No need to pivot hard.
First, the more digital our world becomes, the more passionate we humans become notDigital products and experiences. Birkenstock answers this passion.
Second, Birkenstock is using AI to calibrate demand, optimize inventory and manage its direct-to-consumer pipeline. Don’t chase size. It uses artificial intelligence to make decisions where Every pair of sandals should go from He is most likely to buy them. This accuracy preserves margins and enhances brand value.
This is AI applied to the craft and discipline of presentation – a 250-year-old company quietly using modern tools to improve execution.
In addition to Birkenstock, I recommend several AI Survivor and AI Applier companies in my country Fry investment report Wallet, including:
- A brand of outdoor entertainment products
- A cult-like café
- A king among princes in the drug sector
It is considered,
Eric Fry
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