Before Smartbird mastered the big language model, they made shoes.
The AI infrastructure company’s CEO, Nadia Carlsten, talked about the transition with chief correspondent Ben Bergman on Thursday on Business Insider’s The Long Play.
Its origin is the sustainable sneaker company Allbirds, which rose in the late 2010s. The shoes are very popular among the Silicon Valley crowd. Allbirds goes public in 2021 before the market turns over much of its direct-to-consumer business. The stock quickly fell, and was sold to American Exchange Group in March for $39 million.
“The short answer is that the shoe business is not doing well,” Carlsten said.
The company later sold its footwear business and laid off most of its workforce, rebranding as Smartbird. Pivot AI blew up the stock and went up 800%, although it is now back down. Carlsten, who became CEO in June, said he had never worn such woolen shoes.
“The purpose of the company is to do something important and useful. And for me, I knew that I wanted to do AI infrastructure,” he said.
Having seen the emerging AI infrastructure sector, he believes in the company’s transformation, it is the “right place at the right time” to join.
In the five months since he took over, Carlsten said the experience can be described in one word: exciting.
“I never thought that I would become the CEO of a shoe company and manage what was actually a start-up.” Since taking the role, he has focused on building out new teams, scoring new technologies for the company to look at, and producing a new pipeline of customers.
While the stock price has fallen since the initial pivot-induced spike, Carlsten does not regret taking on the challenge. He is betting on the company’s long-term potential.
“The stock market will do what the stock market does,” he said. “What I want is to make sure that we put the company on the right path, and we can build it quickly and enough so that we have a sustainable business that investors will love. So what happens in the short term? It’s not very important. What happens in the long term is very important.”
When asked why the company decided to reinvent itself in the public eye instead of starting as a private startup, Carlsten countered with the question: “Why not?” he said, “It will come back up.”
To recreate a company from scratch can be a challenge, and the public’s presence is clear, he said. However, Carlsten says reinvention is inevitable for the company.
“It’s a very public reinvention of the company, and people are watching,” he said. “I think every company has to reinvent itself every now and then.”
When asked why the company is so remote, Carlsten said that most of the work at Smartbird is already done or in the data center, which means the office will not be useful.
“We spend a lot of time actually building things, which I love. So when my people are sitting in the office, something is wrong,” he said.
Work in the emerging AI sector
Carlsten says that while his competitors are building similar AI infrastructure, the way Smartbird is doing it is unique.
“For us, it’s about the right infrastructure for the right company at the right time,” he said. “Our business model allows us to work closer to our customers, but is also less capital intensive.”
Smartbird wants to work with companies that have not yet explored the implementation of AI in their systems, he said. As more companies outside of the tech realm look to apply AI to their business, they have the choice to build their own infrastructure or outsource it, and Smartbird wants to be the one to do that for them, he said.
“We’ll do the infrastructure part. We’ll let you focus on the real business,” he said.
The most common misconception Carlsten says he has encountered in business is all about GPUs. He says the company is doing more than just running GPUs.
“It’s really about having a holistic system that customers can use to do AI,” he said.
Another rumbling going on in tech company discourse is whether there is an AI bubble and if it will pop. Carlsten said that depends on how people want to go about defining the bubble.
The excitement in the sector means that funding may go into companies that may not prosper in the future, but this is happening with the advent of new technologies, he said.
“Whenever there’s a transformative technology, this happens,” he said. “Even if we think there’s a bubble, that doesn’t mean the technology isn’t good. It also doesn’t mean the adoption of the technology is going away.”