In a surprising twist, the former sneaker powerhouse Allbirds has shifted gears to embrace the world of artificial intelligence, a move that has already begun to pay dividends. After being acquired by American Exchange Group, the company, now operating under the name ‘NewBird AI,’ has seen its stock prices skyrocket by over 350 percent following the announcement of its new direction.
Originally celebrated as a trailblazer in sustainable fashion, the company from the West Coast is now banking on the burgeoning AI industry, which promises to bring ‘unprecedented demand.’ This strategic pivot comes on the heels of a modest acquisition deal just a few weeks ago.
Founded in 2015 and once buoyed by the enthusiasm of Silicon Valley, Allbirds faced a dramatic downturn as the sneaker market at large experienced significant pressure. The sale of Allbirds for a mere $39 million starkly contrasts with its former glory when it was valued at $2 billion and considered a formidable competitor to sportswear titan Nike.
Even Nike is not immune to the current market challenges, with its own sales plummeting. The iconic brand’s shares have plunged to a 15-year low, losing approximately 75 percent of their value since their peak in 2021.
The company sold for just $39 million – a stunning fall from its $2 billion valuation just four years ago, when it was considered a rival to Nike.
Even industry giant Nike has been struggling, with sales plunging and shares now sitting at a 15-year low after losing around 75 percent of their value since peaking in 2021.
Allbirds’ products were not designed for performance like Nike and Adidas but found their footing with tech workers and millennials who wanted a shoe that sat between business and casual.
The company, founded in New Zealand, has now shut all US stores after closing nine last year and 15 in 2024. At its peak, Allbirds had 45 stores in the US and 60 worldwide. It will now continue as an online-only retailer.
In 2021, Allbirds released its eco-conscious ‘Natural Run’ performance apparel line
Allbirds closed several storefronts in 2024, later reporting a decline in earnings
Revenue dropped to just $33 million in the third quarter of 2025 – down $10 million year-on-year – as the brand blamed ‘structural changes’ in its business.
Joe Vernachio, a co-CEO, said the company is ‘incredibly thankful’ to its employees despite challenges faced by the brand.
‘Over the past decade, Allbirds has evolved into a lifestyle footwear brand known for modern design, innovative materials and unparalleled comfort,’ he added.
Retail expert Hitha Herzog previously told the Daily Mail that Albirds faces a series of problems.
‘The product is not great,’ Herzog said. ‘Its design is not exciting, the color ways are muted and boring, and their performance shoes are subpar compared to their competition.’
Footwear remains available for purchase on the company’s website, including their recent monochromatic collaboration with Pantone. Some social media users theorized about the reasoning behind Allbirds’ declining sales.
‘I bought a pair back in 2021 for a Disney trip, really liked them,’ one Reddit user said.
‘They felt well-made and pretty durable. My wife bought me another pair last year and within a month, there was a hole on the top from my big toe. Sucks to see them go downhill so fast.’
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Is the downfall of once-hyped brands like Allbirds a warning sign for the entire sneaker industry?
Allbirds is known for creating minimalist sneakers from recycled and natural materials
Allbirds was founded by New Zealander Tim Brown, left, and engineer Joey Zwillinger, a renewables expert
Michael Jordan’s Air Jordans helped make Nike the world’s largest sports brand, but the company has been struggling in recent years
Meanwhile, Nike’s revenue has been dropping consistently since early 2024, while footwear companies Adidas and Hoka have seen profits soar.
Shares are at an 11-year low, with the company losing around 75 percent of its value since shares peaked in 2021.
This could be attributed to Nike’s more ‘woke’ image shift, its retreat from major retail partners in favor of direct-to-consumer selling and a deepening sales slump in China.
‘Nike’s results are somewhat better than anticipated, though they show that the brand is having a very uneven recovery and has a lot of work to do to get back on the front foot,’ retail analyst Neil Saunders told the Daily Mail.
