Shoe brand Allbirds is pivoting towards becoming an AI cloud provider in a major pivot.

The firm this week announced the execution of a definitive agreement with an institutional investor for a $50 million convertible financing facility, which will allow the company to pivot its business to AI compute infrastructure.

The pivot comes shortly after the firm announced plans to sell off most of its assets and intellectual property to American Exchange Group.

Allbirds – which is set to change its name to NewBird AI – said it has a long-term vision to become a “fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider.”

The $50 million will be used to acquire GPUs, which in turn will be offered to customers needing access to AI compute capacity.

“Over time, the company intends to grow its neocloud platform by expanding its compute and service offerings, deepening partnerships with operators and customers, and evaluating strategic M&A opportunities,” the company said.

The news was seemingly welcomed by investors, with Allbirds’ stock rising from under $3 per share to around $19 at the time of writing. As noted by research firm Constellation, however, the all-new Allbirds will likely need a far larger cash injection in order to compete in the neocloud space.

Chardan is serving as placement agent on the facility, and Holland & Hart LLP is acting as legal counsel to Allbirds.

Nasdaq-listed Allbirds was founded in 2015 as a footwear and apparel company. The company originally raised money on Kickstarter, with a pitch to use Merino wool from New Zealand, launching with its Wool Runners line of sports shoes.

The firm went public in 2021, but has been downsizing its operations of late and closing a number of stores. Its last annual report noted the company’s ongoing losses and substantial doubts about its ability to continue as a going concern.

In late March, the firm announced a deal to sell its IP and most of its assets and liabilities to fashion brand management firm American Exchange Group for $39 million in a deal set to close in Q2 2026.

While it is probably the highest profile, Allbirds is far from the only company to dive into the AI and data center sector in recent years, despite a lack of relevant history.

A Taiwanese whiskey importer, a recruitment website, a Singaporean healthcare company, an Indian TV production firm, a Chinese car loan financing company, an aviation operator, and an owner of Hard Rock Cafe franchises in Malaysia have all looked to move into the space.