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AI really is transforming the world! The latest example: Dying shoemaker Allbirds is turning itself into an AI chip firm called NewBird AI. Its stock rocketed 600% in response. But before we dig into that bizarre story, we should highlight what may be today’s more meaningful news: Anthropic executive Mike Krieger’s departure from the board of Figma.
This might be what you’d call Figma’s Apple moment. For young folks, we’re talking about the then-Google CEO’s summer-2009 exit from the Apple board. He left a month after Google introduced the Chrome operating system and 11 months after Google’s Android first showed up powering a mobile phone. Both moves put Google into direct competition with Apple, something then-CEO Steve Jobs pointed out to explain why Schmidt was leaving Apple’s board.
Krieger’s exit from the Figma board echoes that episode. He departed on Tuesday, the same day The Information reported on Anthropic’s plans to introduce a new tool for designing websites, which would compete with Figma’s offerings. While that timing was likely a coincidence, Krieger surely knows the two companies are headed for a more intense rivalry.
Until now, Figma and Anthropic have seemed more like business partners. Figma has been actively pitching its products as ideal for working with Anthropic’s Claude Code. Take this blog post from February, which carried this subtitle: “Now you can take workflows that start in Claude Code even further in Figma.” The problem for Figma is that whatever advantages its software offers, some designers are likely to find that simply using Claude is easier. Anthropic has figured that out and so have Figma shareholders—which explains why its stock has dropped 45% this year. What’s next for Figma?
Allbirds’ Pivot
Possibly the only thing more boneheaded than Allbirds’ pivot into AI was Wednesday’s investor reaction. It makes you think that if a shoemaker can do so well jumping into a highly technical, competitive arena it knows nothing about, why aren’t other apparel makers or even food companies following suit?
It’s not clear whose idea this was, or whether anyone from Allbirds’ management and board will stick around to see it through. Allbirds, of course, announced a couple of weeks ago it was selling its money-losing shoe business to a fashion brand for just $39 million. The company could have just distributed to shareholders whatever money was left after payments of debts and other liabilities and called it a day.
But no. Allbirds’ management knows a hot trend when they see one, even if power-hungry AI chips are a massive departure from the environmentally friendly approach to shoes the company championed. It is raising up to $50 million in a convertible note offering to fund the AI chip diversification. (Bloomberg’s Matt Levine has a smart column pointing out that the investor in the convertible offering will do very well if the stock stays at its new elevated levels.)
A bunch of other companies, mostly crypto miners such as CoreWeave, Crusoe and TeraWulf, have already jumped into AI chip rental (the neocloud business), as we have written about here and here. Still, pivoting from crypto mining to AI isn’t crazy, given that both industries involve running servers doing intense computation (not that it’s an easy change of direction). Allbirds, though, is a whole different story. Neither the management nor the board has experience in AI chips, as far as we can tell from their online bios.
Perhaps the board sees this transformation as a way to wring more money out of the public listing. Maybe the idea is to build up a bit of a business and then sell to an existing player. That might work. But, as Sam Lessin wrote in The Information in 2018, pivoting a business like this has hidden costs.
In Other News
• Meta Platforms is reorganizing its hardware division, Reality Labs, in a bid to “adapt and execute faster” (more here).
• Snap said it was laying off about 16% of its workforce, or about 1,000 people, in an effort to reduce its cost base by $500 million and “establish a clearer path to net income profitability,” CEO Evan Spiegel said in a blog post. Snap also foreshadowed its first-quarter earnings release, revealing that revenue rose 12%.
• ByteDance’s cloud computing unit has made the company’s Seedance 2.0 AI video-generation model available globally to enterprise customers in more than 100 countries and regions around the world—but the U.S. is not among them.
• Billionaire crypto entrepreneur Justin Sun, a prominent investor in crypto projects launched by President Donald Trump and his family, on Wednesday labelled a proposal by one of those projects–that would lock up trading of a key token owned by investors–a “scam.”
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