A growing number of companies across industries are abandoning their original business models to chase opportunities in artificial intelligence, as a global surge in demand for computing power reshapes corporate strategy.
From cryptocurrency miners reinventing themselves as data-centre operators to legacy consumer brands attempting dramatic reinventions, the AI boom is increasingly driving unlikely pivots — the latest being footwear maker Allbirds.
The San Francisco-based company said on Wednesday it would shift its focus entirely to artificial intelligence infrastructure, marking a stark departure from its roots in sustainable footwear.
The move comes shortly after Allbirds agreed to sell most of its assets for a fraction of its former valuation, underscoring the pressures pushing companies toward high-growth technology sectors.
Allbirds bets on AI infrastructure
After agreeing last month to sell all its assets for $39 million, or less than 1% of its previous $4 billion valuation, Allbirds said it would “pivot its business” to artificial intelligence.
The company will rebrand as NewBird AI as part of the transition.
In a statement, the company said an unnamed investor had committed $50 million to support the shift, with funds earmarked for acquiring graphics processing units, or GPUs — specialized chips critical for training and running AI models.
“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said.
It added that developers and research groups were struggling to secure the resources needed to build, train and run AI at scale.
“NewBird AI is being built to help close that gap,” the company said.
Investors responded sharply to the announcement, sending the stock up more than 580% on Wednesday.
Even so, the shares remain down over 90% from their 2021 initial public offering, reflecting the company’s steep decline in recent years.
AI pivot reset, investment remains minimal
Founded in 2015 by Joey Zwillinger and Tim Brown, Allbirds built its brand around environmentally friendly footwear made from materials such as merino wool and eucalyptus fiber.
Its early success was driven by strong demand among tech workers, particularly in Silicon Valley.
However, the company struggled to sustain momentum as consumer preferences shifted and competition intensified.
Premium pricing and product missteps eroded demand, leaving the company searching for a new direction.
The recent decision to sell its assets for $39 million effectively marked the end of its original business.
The pivot to AI represents a complete reset — one that analysts say carries significant risks.
“A $50 million investment is a drop in the bucket,” wrote specialty-retail analyst Dylan Carden at William Blair.
“This is by any measure a Hail Mary.”
Retail analyst Hitha Herzog said the excitement over Allbirds “just by putting AI in an announcement” makes it “clearly a meme stock”, BBC reported.
Industry shift toward computing power
Allbirds’ move comes amid a broader wave of companies repositioning themselves to capitalize on the rapid expansion of AI infrastructure.
The surge in demand for computing power accelerated after the release of ChatGPT in 2022, which triggered a global race to build data centres and secure access to GPUs.
Companies across sectors are now competing for the limited chip supply.
Some of the most notable pivots have come from the cryptocurrency industry.
In 2019, amid a downturn in cryptocurrency prices, Atlantic Crypto rebranded itself as CoreWeave, wagering that demand for GPU chips would shift toward artificial intelligence, which also relies heavily on computing power.
That bet paid off after OpenAI launched ChatGPT in 2022, sparking an AI boom that sent demand for computing resources soaring.
Firms that once focused on bitcoin mining are also increasingly transitioning toward AI data centres, seeking more stable and predictable revenue streams.
Publicly listed crypto miners are expected to generate the majority of their revenue from AI operations by the end of this year, according to a Bloomberg report.
Companies such as Cipher Digital and Hut 8 are investing heavily in data-centre infrastructure, while others are selling crypto assets to fund the shift.
MARA Holdings has sold about $1 billion worth of bitcoin in recent weeks to support its move into AI infrastructure.
“The long-term economics of HPC and AI data centres should trump Bitcoin mining. Just from a business operations standpoint, you get more visibility, better margin and stronger cash flows out of the data centre business,” Brian Dobson, managing director at Clear Street, told Bloomberg.
Data from CoinShares shows AI could account for about 70% of combined revenue at listed miners by December, up sharply from around 30% currently.
The shift is already being rewarded by investors.
Shares of early movers into AI infrastructure have surged to record levels, with firms such as TeraWulf, IREN Ltd., Cipher, and Hut 8 landing multi-year agreements with major technology companies, including Google, Microsoft, and Anthropic.
Skepticism over AI pivots
Despite the enthusiasm surrounding AI, analysts caution that not all pivots are grounded in sustainable business strategies.
Bill Kleyman, an AI infrastructure expert and chief executive of Apolo.us, said many companies are turning to AI as a narrative reset rather than a carefully planned transformation.
“Every company wants to be an AI company — some of those shifts are real and strategic, others feel a lot more reactive,” he said in a NYT report.
“The underlying business is struggling; AI presents itself as a compelling narrative reset, and off we go.”
He added that most successful transitions into AI infrastructure require significant capital and technical expertise — factors that may be challenging for smaller entrants.
Singing Machine, a Florida-based company previously known for manufacturing karaoke machines, rebranded as Algorhythm Holdings and pivoted toward AI.
In February, it rattled trucking and transport stocks after claiming it had developed AI technology capable of improving logistics efficiency.
Shares of the former karaoke machine maker surged more than threefold following the February announcement.
However, the stock has since retreated sharply, hovering around $1, down nearly 70% from its February peak and far below the levels it commanded in the 1990s, when its karaoke business was at its height.
For Allbirds, the scale of investment is likely to be a major constraint.
Industry players are committing tens of billions of dollars to build out AI capacity.
For perspective, cloud computing firm CoreWeave plans to spend between $30 billion and $35 billion this year, while Nebius is targeting investments of up to $20 billion.
With just $50 million in initial funding, Allbirds may struggle to compete for scarce GPU resources against much larger buyers.
Echoes of past market frenzies
The rush toward AI has drawn comparisons with earlier speculative waves in technology and finance, including the cryptocurrency boom.
In previous cycles, companies from unrelated sectors rebranded themselves to tap investor enthusiasm.
In bitcoin’s early days, a range of companies—from an e-cigarette maker to a biotech firm and even an iced-tea brand—pivoted toward the cryptocurrency.
The latter drew particular attention, triggering a market frenzy after rebranding itself from Long Island Iced Tea to Long Blockchain.
Similarly, Kodak launched a cryptocurrency initiative in 2018 before pivoting again in 2020 toward pharmaceutical manufacturing with government support.
More recently, companies rebranded as crypto-treasury firms to raise capital for digital asset investments, a trend that has since faded as cryptocurrency prices declined.
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