NEW YORK (AP) — Allbirds, the eco-friendly shoe brand that found its way onto the feet of tech CEOs and movie stars before falling on hard times, is pivoting to artificial intelligence.

On Wednesday the San Francisco-based company said it had signed a definitive agreement with an unnamed institutional investor for $50 million in financing to shift its business to AI infrastructure. It will also have a new name: NewBird AI. It plans to use the proceeds to purchase graphics processing units, known as GPUs. The transaction is expected to close during the second quarter of this year.

“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in the release. “NewBird AI is being built to help close that gap.”

The drastic change of direction has some industry watchers scratching their heads.

“On the surface, it’s a strange pivot,” said AI infrastructure expert Bill Kleyman. “I’ve been in this industry a while, and a company like Allbirds moving from shoes into AI infrastructure is not a very natural adjacency.”

It’s unclear how Allbirds will reinvent itself as a “GPU-as-a-service” business that rents out computing power to AI companies. That means selling access to a huge number of graphics processors, or other specialized AI computer chips designed by companies like Nvidia or AMD, that operate in big data centers typically run by cloud computing giants like Amazon or Oracle.

The business of running physical AI infrastructure “requires access to GPUs in a constrained market, long-term power agreements, advanced cooling strategies, and a credible operating model,” said Kleyman, CEO and co-founder of Apolo.

The announcement comes more than two weeks after Allbirds sold its intellectual property and certain other assets and liabilities to American Exchange Group, a leader in accessories design, licensing and manufacturing, for $39 million. The company owns such retail brands as Aerosoles, White Mountain, Jonathan Adler and Ed Hardy.

That’s a dramatic fall from the Allbirds’ peak in valuation at $4 billion in late 2021. The company had said that it would not be issuing its quarterly earnings report that was set for March 31.

The latest development marks a dramatic departure from when the company was founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger. Its mission: to create footwear from natural material, not synthetics. A year later, Allbirds launched its iconic wool runner shoe. But the company overexpanded, like many dot.com brands that opened physical stores. And many consumers lost interest.

In February, the brand shuttered most of its remaining stores to focus on e-commerce, partnerships with stores and international distributorship. It still operates two outlet stores in the U.S. and two full-price stores in London.

Shares of Allbirds soared more than 600% on Wednesday’s news and were hovering nearly $18 in late afternoon trading. A few days ago, the stock was trading at $3. It once traded at $520 per share.

Kleyman said the stock market surge looks “more like initial excitement and speculative momentum tied to anything AI rather than validation of execution.”

Kleyman also noted that $50 million is not a lot to enter into an infrastructure-heavy market and added that it seems everybody wants to be an AI company.

“Some of those shifts are real and strategic,” he said. “Others feel more reactive. In this case, I think it’s fair to say it can come across as a bit desperate. The underlying business struggled, and AI presents a compelling narrative reset.”

The attempt at a pivot shows that the demand for AI computing power is real, “but so is the hype,” said Jim Piazza, who worked on computing infrastructure at social media giant Meta and now is the chief AI officer at IT services firm Ensono.

Piazza said building a real AI infrastructure business “takes deep capital, technical expertise and disciplined execution,” something that is already “crazy hard for tech-savvy companies” and will be “an impossible challenge” for someone outside of it.