Octopus Energy is spinning off its Kraken AI utility platform into a standalone company, driven by $500 million in committed annual revenue from external clients. The move sets up what could become a $15 billion IPO within the next year, marking one of the biggest enterprise AI spinoffs in the utility sector.
Octopus Energy just dropped the biggest utility tech news of the year. The British renewable energy giant is spinning off its Kraken platform into a separate company, setting the stage for what could become a $15 billion IPO within twelve months. The platform's $500 million in committed annual revenue from external utilities sparked the decision, according to The Wall Street Journal.
This isn't just another corporate restructuring - it's validation of how AI is reshaping the entire energy sector. Kraken was originally built as the internal tech stack for Octopus Energy, but CEO Greg Jackson revealed the company's original vision: "We created Octopus as the 'demo client,'" he told the Journal earlier this year. That demo client now serves over 10.5 million households across the UK and internationally.
The timing couldn't be better. As utilities worldwide struggle to integrate renewable energy sources, Kraken's AI models have become the secret sauce behind Octopus's meteoric rise. The company went from startup to the UK's largest energy provider in just a decade, overtaking 200-year-old British Gas through innovative programs like Zero Bills and Agile tariffs.
Kraken's real power lies in its ability to coordinate distributed energy resources - everything from EV chargers to smart thermostats to home batteries. When renewable energy floods the grid during peak solar hours, Kraken's algorithms can automatically shift customer demand to take advantage. Some customers literally run their laundry for free when there's surplus clean energy.
"The spinoff would help Kraken minimize conflicts of interest as it signs deals with utilities and power providers that aren't Octopus," the company explained. This addresses a key concern for potential clients who might hesitate to adopt technology from a direct competitor. By operating independently, Kraken can position itself as the Switzerland of utility platforms.
