In the business world, there are many stories of companies that were formerly in industry A before entering industry B. Nokia started as a wood processing company, Nintendo started by making playing cards and Samsung sold fish and noodles before all becoming big names in the technology world.
Yesterday, Allbirds announced that they would withdraw from the shoe manufacturing industry and change direction to become an artificial intelligence (AI) data center company. Allbirds was sold last month and the new management team took a drastic step to enter the hot AI arena with the company name also being changed to NewBird AI.
Allbirds has been struggling financially since 2022 due to declining demand and rising operating costs. Allbirds once had a market value of $4 billion but when it was sold last month, the entire company was only worth $39 million
At the time of writing, the company's shares jumped 782% from $2.49 to $21.95 after the announcement. NewBird AI has raised $50 million to acquire GPUs to offer GPU-as-a-service (GPUaaS) and provide cloud-native AI solutions.
Earlier this year, many predicted that the AI investment bubble was just waiting to burst. Despite the risks, there are still investors and companies who are boldly entering an industry that promises huge returns on investment if successful.
