Allbirds, the direct-to-consumer shoe brand, has pivoted to an AI infrastructure business called Smartbird. The company sold its shoe business for $43 million and raised an additional $100 million from the stock market, marking a significant shift in its business model. Now, Nadia Carlsten, the new CEO of Smartbird, faces the challenge of building a sustainable AI business from scratch. Carlsten, a former AWS executive with a PhD in engineering, previously led the European compute company DCAI before taking on this new role. She emphasized that Smartbird’s focus is on providing controlled AI infrastructure for companies that value data sovereignty over scalability. 'We’re going to be recruiting a brand new team for the AI business, and we’re going to be getting an office,' Carlsten told TechCrunch from Amsterdam. 'The shoe business has officially closed as of yesterday, so that’s all done… The first task that I’m tackling right now is rounding up the leadership team, looking for somebody to lead infrastructure operations, for example.'

Smartbird aims to cater to companies that require direct control over the servers running their AI models, typically for political or business-model reasons. Carlsten argued that this market is still nascent, as many firms are still piloting AI tools. She highlighted that potential clients include pharmaceutical, energy, financial, and public sector companies, which are particularly interested in data sovereignty. 'We certainly have anybody that’s within the pharmaceutical industry, energy industry, financial, the public sector,' she said. However, Carlsten acknowledged that established players like Hewlett Packard and Equinix already offer similar services, making it unclear if Smartbird’s business model has the same growth potential as cloud services. 'It’s real business model, but it’s not clear if it has the same growth potential as the cloud services, where expansion is the be-all, end-all.'

Smartbird’s strategy differs from neoclouds, which focus on optimizing chip usage for cost efficiency. Instead, Carlsten emphasized agility and control over the infrastructure stack. 'It’s not about large scales and huge numbers of GPUs, they’re more about agility of these clusters, and more about having control of the infrastructure stack,' she said. The company also plans to deploy compute clusters for several customers by the end of the year. Despite the challenges, Carlsten insisted that the transition from Allbirds to Smartbird was a carefully considered move. 'It wasn’t, 'Let’s just do AI, because it’s AI, and it’s hot,' she said. 'It was really about, do we have a chance to build a business over time that is going to find this niche in the market and be able to grow over time?'

Source: techcrunch