British renewable energy group Octopus Energy is moving closer to a major corporate milestone after securing $1 billion in funding for its artificial intelligence and software arm, Kraken Technologies.

The deal values the business at $8.65 billion and lays the groundwork for a potential public listing by mid-2026.

The planned spin-out, confirmed late Monday by Origin Energy, one of Octopus’s largest shareholders, reflects the growing strategic importance of software and data-driven platforms in the global energy transition, as utilities race to modernize ageing systems and manage increasingly complex power networks.

Origin said the funding round marks Kraken’s first as a standalone business and included Daniel Sundheim’s hedge fund D1 Capital Partners alongside a “major Kraken customer,” which was not named. Origin itself will commit an additional $140 million, reinforcing its long-term bet on the technology platform.

Kraken’s valuation and capital raise underscore how far the unit has evolved from its origins as an internal technology tool within Octopus Energy. The platform now supplies cloud-based software to major utilities, including EDF and E.ON, supporting customer billing, energy trading, grid optimization, demand forecasting, and the integration of renewable energy and electric vehicles.

According to Origin, Kraken’s contracted annual recurring revenue has more than doubled over the past 18 months, driven by strong demand from utilities under pressure to decarbonize, comply with stricter regulations, and cope with volatile power markets. The company is now rapidly approaching its target of managing 100 million customer accounts globally.

“In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan,” Origin chief executive Frank Calabria said, pointing to the scale and commercial momentum behind the business.

Under the proposed structure, Octopus Energy will retain a 13.7% stake in Kraken following the spin-out, while Origin’s interest will remain unchanged at 22.7%.

Calabria said the restructuring would give both companies greater financial and strategic flexibility.

“We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure,” he said.

The move is part of Octopus’ broader effort to crystallize value from its technology assets while allowing the core energy supply business to focus on retail expansion and renewable generation. For Kraken, independence is expected to accelerate customer acquisition, attract new categories of investors, and sharpen its positioning as a pure-play software company rather than an in-house utility platform.

Kraken CEO Amir Orad has previously said the company benefited significantly from being incubated within Octopus, which first deployed the technology internally before licensing it to rival utilities. That strategy helped Kraken overcome one of the biggest barriers in the energy sector: persuading competitors to adopt software developed by a peer.

Over time, Kraken has emerged as what Orad has described as “the modern operating system for utilities,” offering an alternative to legacy IT systems that struggle to handle decentralized generation, real-time pricing, and the electrification of transport and heating.

The spin-out also sharpens the company’s path toward a stock market debut. Speaking to CNBC’s “Squawk Box Europe” earlier this year, Orad said Kraken already had a strong investor base focused on energy and utilities, but acknowledged that a separation from Octopus was necessary to attract a broader pool of late-stage, software-focused investors.

When asked in September about a potential IPO, Orad said the opportunity was “significant,” but stressed that Kraken needed to complete its transition into a fully independent software business.

“Over the years, we expect [the investor base] to evolve to be more software focused, given the separation,” he said.

The deal comes as investor interest in energy technology platforms intensifies, with utilities globally under pressure to digitize operations, improve customer engagement, and support net-zero targets. If completed as planned, Kraken’s spin-out would stand as one of the most prominent examples yet of a renewable-era technology platform breaking out as a standalone business. That will highlight how software and AI are becoming central to the future economics of the global energy industry.

Citigroup has moved closer to fully exiting Russia after its board approved the sale of AO Citibank, its Russian subsidiary, to investment firm Renaissance Capital, a deal that will crystallize a pre-tax loss of about $1.2 billion, largely driven by currency translation effects.

The U.S. lender said on Monday that the transaction is expected to close in the first half of 2026, subject to remaining regulatory and closing conditions, according to a filing with the U.S. Securities and Exchange Commission. The approval marks a significant milestone in Citi’s multi-year effort to unwind its presence in Russia following the invasion of Ukraine and the sweeping sanctions that followed.

Citi said the board approvals will result in a pre-tax loss being recognized in the fourth quarter of 2025. The bulk of the impact stems from cumulative currency translation adjustment (CTA) losses, which arise when the financial statements of a foreign subsidiary are converted into the parent company’s reporting currency.

“These approvals result in a pre-tax loss on the sale for the fourth quarter of 2025, largely related to the currency translation adjustment (CTA) losses that will also remain in Accumulated Other Comprehensive Income (AOCI) until closing,” the bank said in a separate statement.

CTA reflects gains or losses caused by exchange rate movements over time, while AOCI is a balance sheet equity account that holds certain unrealized gains and losses not recognized in net income. Citi noted that while the accounting loss is substantial, the cumulative impact of the transaction will be capital neutral to its common equity tier 1 (CET1) capital ratio, a key measure of bank solvency closely watched by regulators and investors.

The bank cautioned that the final loss could still change, depending on factors such as foreign exchange movements between now and the closing date.

As part of the transaction process, Citi said it will classify its remaining Russian operations as “held for sale” in the fourth quarter of 2025, an accounting step that reflects management’s intent to complete the disposal and further separates the unit from its ongoing operations.

The deal follows explicit approval from the Russian government. Last month, President Vladimir Putin authorized Renaissance Capital to acquire Citibank’s Russian operations, a necessary step given Moscow’s tight controls on foreign asset sales since the start of the war. Such transactions have often required presidential sign-off and have been subject to strict conditions, including pricing constraints and special levies.

Citi has been among the Western banks with the largest and most complex exposure to Russia, and its exit has taken longer than that of many of its peers. In August 2022, the bank announced it was winding down its consumer banking and local commercial banking businesses in the country as part of a broader strategy to reduce risk and simplify its global footprint.

Since then, Citi has continued to pare back activities, manage down assets, and navigate regulatory hurdles in order to leave the market in an orderly manner. The sale to Renaissance Capital represents one of the final steps in that process.

Also, the Russia exit fits into Citi’s wider overhaul under CEO Jane Fraser, who has been reshaping the bank to focus on core businesses and improve returns. While the $1.2 billion pre-tax loss underscores the financial cost of geopolitics and prolonged currency weakness, the bank has consistently argued that fully exiting Russia removes a source of operational, regulatory, and reputational risk.

Once completed, the transaction will effectively close the chapter on Citi’s decades-long presence in Russia, ending a withdrawal that has become emblematic of how deeply the war and sanctions regime have reshaped the global banking industry.

The U.S. government has granted Samsung Electronics and SK Hynix annual licenses allowing them to import American chip manufacturing equipment into their Chinese factories through 2026, offering limited relief to the South Korean chipmakers as Washington tightens its export control regime.

But the decision is believed to offer short-term operational certainty and signals a more restrictive and conditional phase in Washington’s technology policy toward Beijing.

According to people familiar with the matter who spoke to Reuters, the licenses follow Washington’s move earlier this year to revoke broad waivers that had allowed select global chipmakers to operate in China with minimal regulatory friction. Under the new system, approvals will be granted on a year-by-year basis, giving U.S. authorities greater leverage and oversight over the flow of sensitive semiconductor equipment into the country.

For Samsung and SK Hynix, the approval prevents an abrupt disruption to factories that play a crucial role in the global memory chip market. Both companies rely heavily on China as a production base for legacy memory chips, including DRAM and NAND, which are less advanced than cutting-edge logic chips but remain essential to smartphones, consumer electronics, and data centers. Demand for these products has surged alongside the rapid expansion of AI infrastructure, tightening supplies and lifting prices worldwide.

However, the shift away from the “validated end user” status represents a structural change rather than a temporary policy tweak. That privilege, which will expire on December 31, allowed firms such as Samsung, SK Hynix, and TSMC to import U.S.-origin tools without seeking case-by-case approval. Once it lapses, every shipment of American chipmaking equipment to their China facilities will require an export license, adding layers of uncertainty to routine operations such as tool replacement, capacity optimization, and yield improvements.

Industry executives and analysts say semiconductor manufacturing is uniquely sensitive to regulatory delays. Even mature-node fabs depend on a steady flow of spare parts, upgrades, and servicing tools to maintain efficiency. An annual approval regime means long-term investment decisions could increasingly hinge on geopolitical considerations rather than purely commercial logic.

The move also highlights the Trump administration’s effort to recalibrate U.S. export controls. Officials have been reviewing measures they believe did not go far enough in limiting China’s access to advanced American technology under the Biden administration. While the current licenses stop short of forcing South Korean firms to scale back their China operations, they reinforce a broader message that continued access to U.S. technology is conditional and revocable.

For South Korea, the issue carries economic and diplomatic weight. Samsung Electronics is the world’s largest memory chipmaker, while SK Hynix ranks second globally. Any prolonged disruption to their China operations could ripple through global supply chains and potentially inflate memory prices further, affecting downstream industries from smartphones to cloud computing.

At the same time, Washington appears keen to avoid an outright shock to the semiconductor ecosystem. Granting annual licenses allows the U.S. to tighten controls without immediately undermining allied firms or destabilizing markets. It also preserves negotiating leverage, giving regulators flexibility to adjust approvals based on evolving strategic priorities.

Looking ahead, analysts believe the licenses underscore a growing dilemma for global chipmakers: China remains too large and too deeply embedded in semiconductor supply chains to exit quickly, yet operating there now comes with rising political risk. For Samsung and SK Hynix, the one-year approvals buy time, but they also reinforce the need to diversify manufacturing footprints and reduce exposure to policy shifts.