Imagine being asked to run a division that's about to hit its performance targets and deliver a massive payday to the team that created it. Now imagine trying to weasel out of that promise because you regret the deal. And then imagine taking your legal advice from a chatbot instead of your actual lawyers. That's essentially what happened in the Subnautica 2 saga, and a Delaware court has just declared the whole scheme a breach of contract.
Krafton CEO Changhan Kim, who had personally led the acquisition of Unknown Worlds in 2021, felt the company had overpaid and feared making the earnout payment would earn him a reputation as a "pushover." In plain English, this means Kim wanted out of a deal he'd already made. And he was willing to move mountains to avoid it.
Krafton had acquired Unknown Worlds for a $500 million equity payout with up to $250 million in additional earnout for the cofounders if certain sales goals were met by the end of 2025. By mid-2025, as Subnautica 2 headed toward Early Access on Steam, internal financial models predicted over 1.67 million copies sold by Q4 2025, with earnout payments ranging from $191.8 million to $242.2 million. In other words, the bonus was looking very real.
When Krafton's head of corporate development Maria Park warned Kim that firing the founders for cause wouldn't void the earnout and could trigger litigation and reputational damage, Kim bypassed his internal legal team and turned to ChatGPT for help. This is where the story shifts from ordinary corporate greed to something more remarkable.
When ChatGPT initially responded that the earnout would be "difficult to cancel," Kim complained to Park and then formed an internal task force, dubbed "Project X," with a mandate to either negotiate a deal on the earnout or execute a takeover of Unknown Worlds. Rather than accept the chatbot's prudent first answer, Kim kept pushing until he got the advice he wanted.
ChatGPT advised Kim to form a task force to renegotiate the earnout or force a studio takeover; if negotiations failed, to "lock down" Steam and console publishing rights and control over the game's code; to frame the conflict as being about "fan trust" and "quality" rather than money; and to prepare systematic legal defence materials. The chatbot even suggested drafting a public-facing message to win over Subnautica fans, which Kim then asked ChatGPT to write, and it backfired spectacularly, alarming the gaming community and heightening suspicions that something was deeply wrong at the studio.
What makes this story genuinely troubling is that throughout this process, Kim's own team warned him the strategy was dangerous, but he pressed ahead anyway. This wasn't a case of a CEO acting on bad advice; it was a CEO ignoring good advice to take worse advice from a machine.
Kraft on followed through on the plan. The plaintiffs alleged that Krafton sought to delay the Early Access release of Subnautica 2 to avoid triggering the payout, and fired Cleveland, McGuire, and Gill when they refused to do so. When those three were fired and the case went to court, Krafton shifted its defence repeatedly. The publisher claimed the cofounders were fired for failing to get Subnautica 2 ready for a timely launch, then switched to arguing they had unknowingly worked on other projects and tried to steal unauthorised materials, but the court rejected both claims.
The court's ruling declared that "Krafton breached the EPA (Equity Purchase Agreement) by terminating the key employees without valid cause and by improperly seizing operational control of Unknown Worlds." The judge ordered former CEO Ted Gill reinstated as CEO of Unknown Worlds with full operational control extended by the time that elapsed between his wrongful termination and restoration, and Krafton was enjoined from circumventing or impeding Gill's authority over the early access launch of Subnautica 2. The base earnout testing period was extended by 258 days to September 15, 2026.
There's a broader principle at stake here beyond one messy corporate dispute. The judge specifically noted that company executives are expected to exercise independent human judgment, not outsource good-faith decisions to an AI. That's a useful reminder in an era when business leaders are increasingly tempted to delegate accountability to machines.
Krafton says it disagrees with the ruling and is evaluating its options, which likely means appeal. But the ruling does not resolve the former executives' claim for damages or an earnout related to Subnautica 2, with further litigation still pending. That second phase will determine whether Kim's ChatGPT-assisted scheme cost the company anything beyond embarrassment and bad headlines.
For gamers, at least there's some good news. The judge extended the $250 million earnout period to at least September 15, 2026. That means Subnautica 2 now has more time to earn its way to launch, and the people who created it have a fighting chance of getting paid what they were promised.