Do you remember, in the midst of the absolute worst of the crypto phase, when an iced tea company added the word “Blockchain” to their name and saw their stock price spike by almost 400%? We’re officially at that stage of the artificial intelligence hype machine. Allbirds recently announced an AI pivot, and is actually going through with it. The shoe company is changing its name and bringing in a new CEO to lead the shift.
The company has abandoned its arguably iconic Allbirds name in favor of Smartbird, which… sure? Pretty generic, feels more like the name of a startup for the Internet of Things era, especially since AIbirds was right there for them. Smartbird will be headed up by Nadia Carlsten, the previous head of Amazon Web Services’ quantum computing efforts, per CNBC. She most recently served as the CEO of DCAI, an AI infrastructure company in Denmark.
The company previously known as Allbirds, which made wool sneakers, will now be in the business of AI infrastructure as a service, according to Bloomberg. How, exactly? According to a press release the company issued when it initially announced this pivot, it claimed that it will “seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service.” Why is a shoe manufacturer more equipped to do that than anyone else? It is unclear.
What is clear is that whatever Allbirds was in the past will not be a part of its future. In an interview with Business Insider, new CEO Carlsten said she was “blissfully unaware of all things Allbirds,” and insisted, “in a few months, people won’t even remember the shoes.”
By her accounting, she’s basically starting from scratch. All of the manufacturing equipment and anything related to the shoe-making business has reportedly been sold, and Carlston said that “anybody who was dedicated to the retail business is no longer part of the company,” so she’s hiring a whole new team from zero. Well, not exactly zero—there’s about $100 million in its coffers, per Bloomberg. But like, why not just launch a startup and raise that money? One that isn’t a public company from day one and under the scrutiny of shareholders to turn a profit?
The answer to that question may actually lie in the stock price. When Allbirds first announced it was going to pivot to AI infrastructure, its stock price jumped 600%. This announcement of a name change and new CEO resulted in a 50% spike at the time of publication. The market, it seems, is very dumb. Might as well capitalize. Congratulations to all those who get out while others rush in to hold the bag for them.