Allbirds, the maker of minimalist wool sneakers beloved by Silicon Valley, announced on Wednesday that it is leaving shoes behind and pivoting to artificial intelligence. The new focus and rebrand as “NewBird AI” sent the company’s stock up 582% as of mid-day during a flurry of trading.
The surging stock price and new direction is a bizarre, rapid turnaround for a company that had fallen into disrepair in recent years. Once valued at $4bn, Allbirds’ shares had lost 99% of their worth since 2021 and earlier this month the company announced plans for a $39m sale to brand management firm American Exchange Company.
Typical Guardian and finance. It’s nothing, at all, to do with a shoe firm pivoting to AI.
They sold the shoe brand to an investor. They’ve thus got a shell company which is quoted on a major exchange. The shell company raised some more money – $50 million – and that is to be spent upon graphics cards for those who want AI compute time.
Could be a good idea, could be a bad one. But it’s really nothing at all to do with a shoe company doing AI. It’s someone picking up a quoted shell.
Perhaps they’re going to make the graphics cards out of wool.
Why did God decide that so many socialists must be fucking fools? Cruel bastard, God.
You also get it on the right though perhaps not as often. It’s a mental propensity to believe strongly in something against all evidence. It’s probably got something to do with fetishes or a similar brain mechanism.
Free will.
God can give you everything, but you can refuse to use it. And they do.
We’re at the Beanie Babies trading for $2000 stage of the bubble, when the price is so insane it’s put a pair of underpants on its head, stuck two pencils up it’s nose and said “wibble”.
The company said it had seen a “gap in the market” that has left many businesses without enough computing power because the industry cannot keep up with demand.
Its long-term plan is to offer on-demand graphics chips and cloud services that are specially built for AI, it added.
That isn’t a gap in the market. If there isn’t enough GPU to go around, buying some doesn’t increase capacity. It just moves it from being in Amazon, Oracle or Google’s data centres to yours. Those companies are going to beat you on efficiency because of the massive scale they run at. And you can already rent GPU by the hour. And they have various ready-baked services like SageMaker. Click a button, make a cup of tea and it’s there. Amazon can pump in the investment because of the scale.
If you want to do an AI niche, be a specialist. I didn’t do the infrastructure for my wine scanning application. Google ran it and I paid them a few quid. Same as how Gordon Ramsay doesn’t make his own wine. He just pays Berry Bros or whoever and they deliver it.
And raising $50m to spend on GPUs (at a time when semiconductors are ridiculously overpriced) is not a credible number.
That’s not a serious business plan. $50m will buy fuck-all, that cash will all be burned very quickly. Google, MS, OpenAI, Amazon etc. are spending or planning to spend hundreds of billions of dollars on this shit over the next 5 years. And they’re currently losing billions on AI, because AI is hilariously unprofitable. This is like a sweetie shop raising 20p and declaring they’re going to start building Concordes.
It’s idiot bait. No doubt perfectly legal, but it’s not honest.
Nb Allbirds already had form for bait and switch games – they used to be valued at $4Bn, but deliberately lowered the quality of their products (but not prices) to the point they ruined their brand. Reddit is full of complaints about their cheaply made, premium priced, wool trainers falling apart in weeks.
Would you buy a used GPU from such men?
Yes. That’s in the region of 2000 5090s. Or about 20 of the AI clusters that NVidia has switched its capacity to.
Because an AI company can and will pay 10-100x what a gamer will. This is not surprising on consideration, because an AI company might actually be able to make some money from it, while a gamer is using it for leisure activity.
This is not surprising on consideration, because an AI company might actually be able to make some money from it, while a gamer is using it for leisure activity.
You are a lot more bullish on AI than me. I’m so bearish, I did a shite in the woods and then ate some Australian backpackers.
They tasted like upside down chicken.
Nobody is making any money from AI, except Nvidia. If they’d stuck to a pick and shovel play, they’d be laughing.
But they’re actually financing their own customers, and are taking enormous financial risks on something that has yet to find enough paying customers willing to cover the costs of all the compute they’re using. At the moment, ChatGPT, Claude and Gemini users are burning a lot more valuable electricity than the price of their subscriptions would buy. So every new customer just means bigger losses for the AI providers. Sandcastles in the sky, it is. Danger, danger Will Robinson!
You are a lot more bullish on AI than me. I’m so bearish, I did a shite in the woods and then ate some Australian backpackers.
Damn near wet myself at that one. Bravo, Steve!
The problem with machine learning/AI is that it’s a “probably right” answer. And most folk talking about it being the new hotness don’t get this.
And no, you can’t change that. It’s fundamental to it.
So it works as suggestion technology to people who are skilled enough to know when it’s crap or not. Like it could diagnose based on symptoms and maybe flag up a rare disease a doctor doesn’t know about. But he knows how to verify that rather than injecting someone with heroin. He looks up the disease in a medical book, maybe refers to a specialist.
Or you use it for trivial things like Netflix recommending movies.
And throwing more and more data and processing at it doesn’t get to 100% and removing humans. It’s still probability. And probability calculations are logarithmic with the amount of data.
The big thing with regular computing is that you could annihilate jobs. You can do airline bookings without human agents.
It’s why self driving cars are a bit Mechanical Turk. There are people watching remotely who monitor and can take over. It’s why that power outage in San Francisco caused a huge jam. The traffic lights got knocked out, so humans had to take over all the cars and the ratio isn’t 1:1. So each Ashok had to drive the 4 cars they watch.
It’s also why I’ll be loathed to use a self driving car. Because I don’t trust the idea of a bloke at the end of WiFi keeping us safe.
I’m big into saas stocks at the moment. All depressed because of morons who think some company is going to rip out the proven solution of Salesforce for their own vibe coded thing, or that lawyers will use chatgpt rather than LexisNexis.
I’m just sitting back waiting for the bubble to pop. VCs will flog off the ai companies to idiot public investors, at which point they’ll stop going on podcasts to tell people it’s the New Hotness and soon after it’ll be Old and Busted.
Yesterday on the news – the proper evening news – was an in-depth report of a Pokemon card that has just sold for 1.something meeeellion dollars.
My daughter plays. Like tournaments. And if she gets rare cards just sells them. Makes a bit of beer money.
Allbirds aren’t real.
Oh they are… They’re a subspecies of the radial-striped sphincterfinch, also known as the puckerbird.
Ah, assume $40 bar in cash from the sale, which includes “dozens of stores worldwide” cf. The Guardian, plus $50 bar from issuing converts to a thus far unidentified investor.
At least one outstanding lawsuit (hey, it’s the US) with t’stock at about two bucks, now twenty something.
Tee Hee.
But it’s really nothing at all to do with a shoe company doing AI.
???
Yes it is. It’s substantially the same people running the company. Current CEO was the COO from 2021.
They recently sold off their IP for a pittance and now want to “pivot” to “AI”, true. But this is a company with 10 years experience in shoes, now announcing it’s going to be an “AI” company based on 0 years experience in AI.
So yarp, I would say it’s accurate to describe this as a shoe company sticking its toe in artificial intelligence.
This is vintage South Sea Bubble behaviour. Idiots who bought the stock are the canaries in the coal mine. All that money chasing loss-making enterprises with a business plan that’s less realistic than buying lottery tickets
Should make the hairs rise, this kind of thing. The losses, when they crystallise on the balance sheets, are going to mean a tsunami of business failures, pensions evaporating into the digital ether, and mass unemployment.
Incidentally, Sam Altman’s home has been attacked twice in the last week. Better get used to living with bodyguards, Sam.
But it’s really nothing at all to do with a shoe company doing AI.
The business school mantra – once you got a good MBA you can run any business.
And everyone can observe this is nonsense. It’s one of my red flags for dumping stock, that an unrelated CEO takes over.
If you have worked in airlines or logistics for decades, you instantly know if an underlings idea about running planes is bad or not. You have obscure knowledge about weather problems or strike-happy Frenchmen that outsiders don’t know.
Kate Swann worked out great at WH Smith because she’d worked her way up in Argos which is not that different.
I’m thinking of getting some Pets at Home shares. Their CEO left WITH IMMEDIATE EFFECT but she came from services, not retailing and the new CEO is ex-Waitrose.
There may also be some tax loss carry-forwards that could be applied to a new business line’s profits (should there be any) which is why they are using the existing shell of a corporation rather than form a new one.
I thought it had to be in the same line of business or is that just UK?
Anyone who knew this announcement was coming has now become astonishingly rich, before a dollar is even spent on the venture let alone earned from it.
Only the wickedest of tongues might dare to imply that is the point.
Ah yes, a shining example of why limited liability makes us all so so much richer…….