The investment paves the way for Kraken to separate from Octopus Energy, potentially leading to an initial public offering (IPO) in the future. Greg Jackson, founder and chief executive of Octopus, indicated to the BBC that there was a strong possibility of Kraken listing its shares "in the medium term," with the location of the flotation being considered for both London and the US markets.

Kraken Technologies utilizes artificial intelligence to automate customer service and billing processes for energy companies. The platform is also designed to manage energy consumption patterns, offering rewards to customers who reduce their usage during peak demand times. This capability is particularly relevant in the context of grid stabilization and demand response programs.

Initially developed for internal use by Octopus Energy, Kraken has since expanded its client base to include other major utilities such as EDF, E.On Next, TalkTalk, and National Grid US. The platform currently manages 70 million household and business accounts globally.

The majority of the $1 billion investment will be used to further develop and expand Kraken's technological capabilities and market reach. The spin-off is expected to allow Kraken to operate with greater autonomy and attract further investment, accelerating its growth in the competitive energy technology sector. The move reflects a growing trend among energy companies to leverage advanced technology to improve efficiency, customer experience, and grid management.