Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Octopus, Energy Group Planning too spin off. It's Cracking Technology
Speaker 2: software platform unit. If you're not familiar, well, energy companies
Speaker 2: definitely are. Cracking is a software platform, as we mentioned,
Speaker 2: a company, it helps utilities manage the transition to cleaner energy.
Speaker 2: And we've got a great guest to explain what it's
Speaker 2: all about. What's going on.
Speaker 3: I'm here, alrit is here, CEO of Cracking Technologies. As
Speaker 3: the company bio notes, he's a multi time CEO, entrepreneur,
Speaker 3: and an AI analytics, cyber and fintech veteran. He's here
Speaker 3: in the studio with us. Welcome, How are you very good?
Speaker 1: Thank you.
Speaker 3: Look, as Carol mentioned, energy companies are very familiar with
Speaker 3: what you do. But if people think about utilities and
Speaker 3: the transition to renewables, how does your company help them
Speaker 3: do that?
Speaker 1: So every utility on the planet is evolving these days
Speaker 1: because the technology behind the energy is evolving. You have
Speaker 1: from electricity at every home, smarts homes, evs although it's renewable,
Speaker 1: solar and the like, vainly to modernize ver entire infrastructure,
Speaker 1: from building into communication, from hard price to modern technology.
Speaker 1: We help him do that.
Speaker 3: Hold on, I thought the president is canceling wind projects
Speaker 3: and he's talking about drill drilling more in the US
Speaker 3: and building nuclear. Look, nuclear takes a really long time.
Speaker 3: We've spent a lot of time talking about that. Are
Speaker 3: utilities pulling back on renewables?
Speaker 1: The state with the most investment in renewable right now
Speaker 1: is Texas. It's cheaper, Solar is cheaper, more accessible, more affordable.
Speaker 1: You can bite faster than building a nuclear power plants
Speaker 1: more solar investments than any other energy form. It's a
Speaker 1: political can it be done?
Speaker 3: Even with tariffs on hardware that comes from China?
Speaker 1: Obviously it's more expensive that way, But in general, solo
Speaker 1: became so cheap and it's getting cheaper every day that
Speaker 1: everyone are moving to that. But it's a mix. It's
Speaker 1: never just so all wind or nuclear. It's always a mix.
Speaker 2: Well, so I'm still trying to unders down what you
Speaker 2: guys do your platform, So what are you helping energy
Speaker 2: companies do.
Speaker 1: I'll give you an example. If you have your colling
Speaker 1: your home during the summer, or you have an electric
Speaker 1: vehicle you charge at seven pm when you get home,
Speaker 1: that creates a massive spike on the grid. And the
Speaker 1: issue is the grid is actually built for the maximum
Speaker 1: point in time, so every spike is really expensive for
Speaker 1: us as consumers. What we do is help manage that spike,
Speaker 1: spread it a bit. Maybe we charge your car a
Speaker 1: bit later at night so on as you wake up
Speaker 1: and you have enough juice, Maybe we cool your home
Speaker 1: slightly differently during the day. That's one example. There's many
Speaker 1: examples like that. We can move shift load between the
Speaker 1: weekend during the day. You can do dynamic pricing, so
Speaker 1: you incentivized consumers to spend the right time and right energy.
Speaker 3: Is your software necessary because the grids in many parts
Speaker 3: of the United States are not sufficient.
Speaker 1: So for two decades we did not have any increase
Speaker 1: in load and demand in the US.
Speaker 3: And now we found AI.
Speaker 1: Not just AI with more manufacturing, more evise, we move
Speaker 1: from gas to electricity and so on.
Speaker 3: What was moving from gas to electricity the right move
Speaker 3: in hindsight.
Speaker 1: Yes, houses barn less if you use electricity, it's a
Speaker 1: fundamental it's a safety thing, it's easier, easier to transport.
Speaker 1: There's a lot of advantages. But we do need to
Speaker 1: update our agreed.
Speaker 3: But does it financially make sense? It's consumers.
Speaker 1: Gas parces go up and down. An electricity form solar
Speaker 1: is actually really cheap when the sun is up. If
Speaker 1: you put the buttery, you store it for night. You
Speaker 1: can actually reduce electricity prices using these technologies.
Speaker 2: You know what's interesting is I mean Octopus has said
Speaker 2: that you guys help lower bills when renewable surge, but
Speaker 2: energy prices are still high for many households. Just talk
Speaker 2: to my husband's like, why is it so high? Why
Speaker 2: should consumers believe that this software benefits them and not
Speaker 2: just your bottom line?
Speaker 1: Because unrelated to cracking, the entire industry now need to
Speaker 1: invest in infrastructure, adding more capacity and improve the grid.
Speaker 1: That is going to cost a lot of money. Any
Speaker 1: usage of technology to optimize that will reduce that investment
Speaker 1: because we reduce the peaks and part of that saving
Speaker 1: can go to every household.
Speaker 2: Is there a point though, where the grids are built
Speaker 2: I mean, we've been talking about this and how much
Speaker 2: they're maxed out, and now we've got all of the
Speaker 2: AI demand kind of starting to be factored in. But
Speaker 2: is there a point where the grid is built out
Speaker 2: and we don't need a software platform because we don't
Speaker 2: have peaks or we have enough.
Speaker 1: Even when the grid is perfect, we still need to
Speaker 1: choose which energy source do we use. The sun happens
Speaker 1: to be free, but it's not always there. If we
Speaker 1: can shift the usage and pick the right moments, we
Speaker 1: can reduce costs.
Speaker 3: You've talked a lot about solar, but wind is also
Speaker 3: of interest to us, not just because of what's happening
Speaker 3: offshore of the United States or what's not happening offshore
Speaker 3: of the United States right now. Is this administration making
Speaker 3: a mistake canceling wind power projects?
Speaker 1: Look, some countries believe it's a really good investment for
Speaker 1: the future. The truth is you need to mix. You
Speaker 1: need variety. The ideal mix is a bit of everything
Speaker 1: versus choosing one over the other.
Speaker 3: So you think the US should have wind power, I.
Speaker 1: Think we need to have a mix of everything versus
Speaker 1: just pick one or favorite and price goes into account.
Speaker 1: Investing in you azz, for example, there's a five year weight.
Speaker 1: There's a line to get a new generator, a new turbine,
Speaker 1: So we have to have a mix.
Speaker 2: We are talking with a mirror or he is chief
Speaker 2: executive officer of Kracking Technology is joining us here in studio.
Speaker 2: There let's talk about the spin off and why it's happening.
Speaker 2: Critics are saying that spinning this off is less about
Speaker 2: strategy and more about extracting value for investors. So how
Speaker 2: do you respond to this view a mirror that this
Speaker 2: is a financial engineering play rather than an innovation story.
Speaker 1: Yeah, Kracken was born inside an energy company. Very few
Speaker 1: successful tech companies were born inside an energy company. It's
Speaker 1: such actually quite rare. It made us who we are,
Speaker 1: improved our technology and knowledge of the space tremendously. But
Speaker 1: we would like to work with other energy companies who
Speaker 1: may compete with our parent company. We'd like to invest
Speaker 1: in other markets that our parent company may not play in.
Speaker 1: So we cannot grow and innovate and service the market
Speaker 1: when we're limited to a certain parent company.
Speaker 2: So you're saying that by going out on your own,
Speaker 2: you're able to access a lot more companies. What does
Speaker 2: that mean dynamically in terms of how big your company
Speaker 2: could be? I mean Sky News reported that you guys
Speaker 2: could be worth as much as fourteen billion. We have
Speaker 2: heard ten billion.
Speaker 1: I've heard the rumors. I have no clue what's the number.
Speaker 2: But you understand the business and you understand that by
Speaker 2: spinning off what you might be able to access. So
Speaker 2: what does it mean in terms of valuation or is
Speaker 2: this all hype in terms of do those numbers make
Speaker 2: you nervous?
Speaker 1: First of all, expectations should make you nervous. Our job
Speaker 1: is to be with a great business and hopefully meet
Speaker 1: each and every expectation down the road. But by splitting
Speaker 1: the two companies, we can attract capital and investors that
Speaker 1: are experts in software, not just in energy experts at
Speaker 1: leaf stage software companies. Five hundred million dos ARL is
Speaker 1: not your typical startup. This is scale, so it would
Speaker 1: definitely allow us to attruct the right capital structure and
Speaker 1: the right investors over time.
Speaker 3: Some of the mag seven are actually eyeing energy, Amazon, Google,
Speaker 3: Microsoft looking at the energy space, especially AI driven grid management.
Speaker 3: Why should utilities bet on you rather than going with
Speaker 3: a larger player.
Speaker 1: So kracking is unique in that it does only one thing.
Speaker 1: We only do the platform for utilities for energy companies,
Speaker 1: and it's a very wide system end to end. The
Speaker 1: problem is the alternative you can go with Oracid and
Speaker 1: SAP and other companies. You will need to buy a
Speaker 1: dozen to three, four or five all the way to
Speaker 1: fifty systems in order to service for technology stock. It's expensive,
Speaker 1: it's slow, it's not fit for purpose, it's not designed
Speaker 1: for the needs of an energy company. And that's where
Speaker 1: we're coming in.
Speaker 2: So when does this all happen?
Speaker 1: So we've been running independently operationally for the last eighteen months,
Speaker 1: two years. We're now splitting physically the two structures the
Speaker 1: cup table, and that is going to end by mid
Speaker 1: next year.
Speaker 2: By mid next year, and are you going to be
Speaker 2: a publicly held.
Speaker 1: Entity or will stay private at that point in time.
Speaker 1: Obviously it opens options down the road, but right now,
Speaker 1: the first step is split the two.
Speaker 2: What's a risk to the business? What's the thing that
Speaker 2: kind of worries usually look at the outlook? What is
Speaker 2: it that's the thing that I hate to say keeps
Speaker 2: you up at night because everybody throws that out there.
Speaker 1: I have three teenagers. Okay, there's more than one. But
Speaker 1: the another one thing is the demand right now to
Speaker 1: modernize our energy infrastructure in every country is spiking in
Speaker 1: each and every country. And our job is how do
Speaker 1: we service as many utilities as we can and make
Speaker 1: sure each and every project is a success. To date,
Speaker 1: all of our migrations. We service seventy million households. All
Speaker 1: of them have been successful. Want to keep that truck
Speaker 1: Recorde while handling more and more dema.
Speaker 2: Just real quickly twenty seconds. Is most of your business
Speaker 2: in the US or is it global.
Speaker 1: Globally all over Europe? Half of the UK is running
Speaker 1: on Krak in Australia, Japan and Germany, France and the
Speaker 1: US national Greg just announced we picked Krakcken to run
Speaker 1: for technology.
Speaker 2: We'll stay in touch, love to hear more as you guys,
Speaker 2: and when you are officially I guess. Amir ord He's
Speaker 2: CEO of Krakin Technology, is joining us in studio