Allbirds changes its name to Smartbird as it shifts focus to AI.

      Allbirds, the eco-friendly footwear brand that went public with a $4.1 billion valuation in 2021, has officially rebranded itself as Smartbird and has appointed a new CEO to spearhead its shift towards AI computing. On Wednesday morning, shares surged over 50% before retracting.

      The rebranding finalizes a transformation initially revealed in April when the company announced it would sell its shoe business for $39 million and transition to a GPU cloud provider named NewBird AI. This announcement resulted in a staggering 582% increase in stock value in one day, although most of those gains were lost in the ensuing weeks.

      New identity, new leadership, and no footwear

      Smartbird has chosen Nadia Carlsten to serve as president and CEO. Carlsten previously led the Danish Centre for AI Innovation (DCAI), where she initiated Denmark's first AI supercomputer, Gefion, in collaboration with Nvidia.

      Prior to her time at DCAI, she worked for three years at Amazon Web Services, helping to launch Amazon’s quantum computing service. She also has experience at Google spinoff SandboxAQ and possesses an engineering doctorate from the University of California, Berkeley.

      Carlsten succeeds Joe Vernachio, who has stepped down from both his role and the board. In an interview with Business Insider, she stated she was "blissfully unaware of all things Allbirds" and anticipated that "in a few months, people won’t even remember the shoes."

      The neocloud initiative

      Smartbird intends to offer dedicated AI infrastructure as a managed service, providing GPU compute capabilities to enterprise clients through long-term leases. To support this plan, it has increased its convertible financing facility from $50 million to $100 million, although the convertible structure poses potential dilution risks for existing shareholders.

      This strategy positions Smartbird in a competitive landscape. CoreWeave, which shifted from crypto mining to GPU cloud services in 2019, is set to join the Nasdaq-100 this month with a valuation exceeding $40 billion, having invested years in infrastructure development to reach this stage.

      Another crypto-to-AI neocloud, Nscale, achieved a valuation of $14.6 billion in March after forming agreements with Nvidia and Microsoft. Former Bitcoin miner IREN secured a $2.1 billion Nvidia warrant as part of a five-gigawatt data center project, but it similarly had existing infrastructure to leverage.

      Smartbird, however, does not have such advantages. The company indicated that it is "in active discussions with prospective customers" and "currently designing its first cluster deployments," meaning it currently lacks data centers, customers, and revenue in its new venture.

      Resonances of the blockchain bubble

      The situation draws familiar comparisons to past events. In 2017, Long Island Iced Tea rebranded as Long Blockchain Corp, experienced an almost 300% surge in stock price, and was subsequently delisted from Nasdaq while facing SEC insider-trading allegations.

      Market analysts have noted similarities between AI stock valuations and the dot-com bubble, with the S&P 500’s cyclically adjusted price-to-earnings ratio nearing levels last seen in March 2000. Whether Smartbird can steer clear of a similar outcome depends on its ability to construct a viable business from scratch.

      A Nasdaq listing and $100 million in convertible financing provide an advantage over a typical startup, but it is still a significant distance from having operational data centers, paying clients, or a competitive edge in a market already saturated with well-funded neoclouds and hyperscalers.