More than half the value created by the recent wave of AI rebrandings has evaporated. The Financial Times counted at least 27 companies that renamed themselves or announced an AI focus since 2023; their combined market value more than doubled at the peak, and by the end of September most of that gain had been erased. Seven of the 27 trade below where they stood before saying a word about artificial intelligence.

The pattern is broad, fast and, for some participants, expensive.

• Allbirds, the fallen wool-sneaker brand, announced a move into AI computing in April. The stock jumped 582% in a single day.
• Myseum, a social network, added ".AI" to its name and unveiled plans for AI agents. Shares rose 146% the next trading day.
• Algorhythm, a tiny former karaoke company, talked up an AI tool for trucking in February. Shares shot up 450%, and trucking stocks briefly lost about $17 billion in market value.
• Chicken Claypot, a restaurant chain, said in July it would maintain data centers in Malaysia.
• Hoth Therapeutics, a cancer drug developer whose auditor had raised doubts about its survival two months earlier, renamed itself Rocket One and announced a push into semiconductors and the "orbital economy."

Napster, the late-90s file-sharing service now owned by Infinite Reality, has joined the queue. It struck a deal with Gems Education in Dubai to build digital twins of instructors that students could query around the clock. The music streaming service Napster had become quietly shut down in January.

Is the pivot pure theater?

Not entirely. Some of these companies have produced real revenue and contracts.

Algorhythm's AI logistics business reported $3 million in second-quarter revenue, up 161% year on year, and said it had expanded a contract with Procter & Gamble. Myseum entered AMD's AI developer program and later said AWS would fund part of its AI development. Rocket One continues to advance Hoth's old biotech programs through a subsidiary while building the semiconductor business.

Chicken Claypot, for its part, holds an actual $50 million contract — a three-year deal covering maintenance and technical support for data centers in Malaysia, with possible expansion elsewhere. The customer's identity is confidential under an NDA.

How badly have shareholders done?

Badly, in most cases, and quickly. Chicken Claypot's stock is down more than 70% since its July announcement. Allbirds, renamed Smartbird in June, is down more than 80% from the post-announcement pop — though only 18% below where it started the year, a measure of how far it had already fallen.

The strategy has history. Stocks that added ".com" to their names in the late 1990s beat the market by 72% within 10 days. Long Island Iced Tea became Long Blockchain in 2017 and rose 500%, before drawing SEC scrutiny.

Regulators are watching this cycle too. The SEC has warned about "AI washing" since 2023 and in March 2024 settled its first cases against two investment advisers that claimed to use AI when they did not. Those were investment firms, not operating companies, but the SEC's chair at the time, Gary Gensler, said corporate AI washing could break securities laws as well.

Why keep doing it?

Because the alternative may be worse. Most of these companies were not thriving before the pivot, and no one can say what would have happened without it. The appeal resembles a SPAC's: the corporate structure, ticker and shareholders already exist, and management needs only a new story.

The macro backdrop explains the temptation. Nearly every top performer in the S&P 500 this year sold something that went into or came out of a data center, and AI's buildout and related investments account for roughly one-third to one-half of recent U.S. economic growth.

The scoreboard, so far, says most of these stories end the same way: a spike, a fade, and a smaller company than the one that started.