When Allbirds turned to AI in April, it felt like a “Silicon Valley” joke unleashed on TV: The direct-to-consumer shoe purveyor whose understated knocks helped define what we’ll loosely call “Silicon Valley style” had discovered a new trend to chase.
The move was right out of the meme stock playbook written by GameStop: Take a struggling public company, latch on to the hottest fad, and reap the benefits of a rising stock price as retail investors pile in.
Well, it worked. The company sold its footwear business for $43 million, raised another $100 million from the stock market, and is now called Smartbird.
Now Nadia Carlsten has to make it work. A former AWS executive with a PhD in engineering, Carlsten most recently led European computing company DCAI before starting yesterday as CEO of Smartbird.
“We’re going to recruit a whole new team for the AI business and get an office,” Carlsten told TechCrunch from Amsterdam. “The shoe business has been officially closed since yesterday, so it’s all over… The first task I’m dealing with right now is getting the leadership team together, looking for someone to lead the infrastructure businesses, for example.”
Call it a startup with a single founder and a very large circle. What follows is less clear.
Smartbird aims to be an AI infrastructure provider, building on the seemingly bottomless demand for computing to train and run deep learning models. However, unlike neoclouds, which relentlessly match the price of chips over the cost of GPU time or discrete inference, Carlsten will aim for more carefully managed deployments. Ideal Smartbird customers need direct control of the servers running their models — usually for political or business model reasons — and value data sovereignty over public cloud scalability.
Carlsten could not yet estimate the size of this market and argued that it was quite nascent, as many companies are still only piloting AI tools. At DCAI, he has worked with Novo Nordisk and other European companies that are particularly interested in data dominance or operate special models: “We certainly have anyone involved in the pharmaceutical industry, the energy industry, the financial sector, the public sector,” he said.
In Carlsten’s view, this means that Smartbird is not competing with hyperscalers or new clouds, but with the company’s internal projects. Still, there are established companies in this space — Hewlett Packard offers a single-tenant managed AI computing service, as does data center giant Equinix.
It’s a real business model, but it’s not clear if it has the same growth potential as cloud services, where scaling is the be-all and end-all. Carlsten said it expects to have computer clusters deployed for several customers by the end of the year. Other startups, such as inference cloud General Compute, have bigger ambitions — the company announced a $300 billion chip order when it emerged from secrecy last month.
Carlsten says he doesn’t need big chip commitments to realize Smartbird’s vision because his potential customers need hundreds to thousands of chips – “it’s not about large scales and huge numbers of GPUs; it’s more about the flexibility of these clusters and more about controlling the infrastructure stack.”
Smartbird is also unlikely to compete with rivals on price, as cloud services go to great lengths to optimize chip usage 24 hours a day to deliver the cheapest computing, although Carlsten suspects that companies with specialized workflows will be able to operate more efficiently with their own servers.
Demand for AI infrastructure is a powerful force in the market, driving up stock prices for chipmakers, cloud providers and energy companies, even convincing investors that orbital data centers are a viable idea. But Carlsten insists Allbird’s transition was carefully considered.
“It wasn’t, ‘Let’s just do AI, because it’s AI and it’s hot,'” said Carlsten, who will be paid an annual salary of $700,000 and awarded about $9 million worth of stock for taking the job. “It was really about, do we have an opportunity to build a business over time that will find that niche in the market and be able to grow over time?”
When Allbirds spun off, one thing it didn’t follow was Public Benefit Corporation (PBC) status, which was intended to enshrine the sustainability commitments that were part of the shoe company’s offering. PBC charters are often used by companies to highlight non-financial promises. OpenAI, for example, is a PBC with an emphasis on AI security. This change in direction, however, suggests that the PBCs are hardly ferrous.
Carlsten said Smartbird’s board has made a long-term commitment to execute on its AI strategy.
“There are some companies out there chasing AI,” he told TechCrunch, “but at the end of the day, what matters is, is there real weight behind the pursuit?”
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