The investment paves the way for Kraken to separate from Octopus Energy, potentially leading to an initial public offering (IPO) in the future. Octopus founder and chief executive Greg Jackson told the BBC that there was "every chance" Kraken would list its shares "in the medium term," adding that the location of the flotation was being considered "between London and the US."

Kraken Technologies utilizes artificial intelligence to automate customer service and billing processes for energy companies. The platform also manages energy consumption by enabling utilities to reward customers for reducing their usage during peak demand times. This capability is crucial for grid stability and promoting energy efficiency.

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 the platform and expand its reach.

The technology addresses a critical need in the energy sector: efficient and responsive customer management. By automating tasks and optimizing energy usage, Kraken aims to reduce operational costs for utility companies and improve the overall customer experience. The platform's ability to manage demand response programs is also increasingly important as the energy industry transitions to more renewable sources, which can be intermittent.

The potential IPO of Kraken Technologies is expected to draw significant interest from investors, given the growing importance of AI and automation in the energy sector. The spin-off will allow Kraken to operate independently and pursue its own growth strategy, while Octopus Energy can focus on its core energy supply business. The move reflects a broader trend of energy companies investing in technology to improve efficiency and adapt to the changing energy landscape.