CEO Asked ChatGPT How to Dodge $250M Bonus - Lost in Court
Krafton's CEO used ChatGPT to design 'Project X' - a corporate takeover strategy to avoid paying Subnautica creators a $250M bonus. A Delaware judge reversed everything and called it out by name.
5 min read
TL;DR
- Krafton CEO Changhan Kim used ChatGPT to design a strategy to avoid paying a $250 million bonus to Subnautica's creators
- ChatGPT produced "Project X" - a corporate takeover plan including seizing publishing rights and framing the conflict as being about "quality" not money
- Kim's own head of corporate development warned him the plan would trigger lawsuits. He ignored her and followed ChatGPT's advice instead
- Delaware Vice Chancellor Lori Will reversed everything: reinstated the fired CEO, extended the bonus deadline, and called out the AI consultation in the ruling
- The gaming community spotted the ChatGPT-written public statement right away
In 2021, Krafton - the South Korean company behind PUBG - acquired Unknown Worlds Entertainment, creators of Subnautica, for $500 million. The deal included a $250 million earn-out bonus tied to Subnautica 2's sales performance. The contract guaranteed the studio's independence, with CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire retaining operational control. They could only be removed "for cause."
When internal projections showed Subnautica 2 was on track to trigger the full $250 million payout, Krafton CEO Changhan Kim decided to find a way out of paying it.
He did not call his lawyers. He opened ChatGPT.
The ChatGPT Conversation
Kim described the acquisition deal to ChatGPT as a "pushover" contract and asked whether the earn-out could be cancelled. ChatGPT's first response: it'd be "difficult to cancel."
Kim didn't accept that answer. He kept prompting. ChatGPT eventually produced what became known internally as "Project X" - a multi-stage corporate takeover strategy:
- Form an internal task force to renegotiate the earn-out or force a studio takeover
- Seize Steam and console publishing rights and control over Subnautica 2's source code if negotiations failed
- Frame the entire conflict around "fan trust" and "quality" rather than finances
- Prepare legal defense materials for anticipated pushback
- Draft public messaging to win over the gaming community
Kim's own head of corporate development, Maria Park, explicitly warned him that dismissing the executives "for cause" would not remove the bonus obligation and would expose Krafton to "lawsuit and reputation risk."
Kim followed ChatGPT's advice instead of Park's.
What Happened Next
Krafton fired all three executives - Ted Gill, Charlie Cleveland, and Max McGuire - without legitimate cause. Steve Papoutsis was installed as replacement CEO. Kim had ChatGPT draft the public statement explaining the changes.
The gaming community saw through it right away. The statement, as multiple observers noted, "read like corporate damage control" - because it was literally generated by an AI following a script about framing financial disputes as quality concerns.
The Court Ruling
On March 16, 2026, Delaware Vice Chancellor Lori Will ruled that Krafton breached its Equity Purchase Agreement with Unknown Worlds. The ruling:
- Reinstated Ted Gill as CEO with authority to restore the co-founders
- Extended the earn-out deadline by 258 days to September 15, 2026 (potentially March 2027) to compensate for the disruption
- Prohibited Krafton from interfering with Subnautica 2's release schedule
- Explicitly called out Kim's use of ChatGPT in the ruling
Judge Will wrote that Kim "consulted an artificial intelligence chatbot to contrive a corporate takeover strategy" after deciding the contract was a "pushover deal." The ruling emphasized that corporate executives must exercise independent human judgment rather than delegate critical business decisions to AI.
The Day After
One day after the ruling reinstated Gill, Papoutsis - who was supposed to be removed - announced a May 2026 early access launch for Subnautica 2 without Gill's knowledge or approval. Gill's legal team filed a contempt complaint. The game's release remains in limbo.
| Event | Date |
|---|---|
| Krafton acquires Unknown Worlds | 2021 |
| Internal projections show $250M payout likely | Pre-2025 |
| Kim consults ChatGPT, develops "Project X" | 2025 |
| Gill, Cleveland, McGuire fired without cause | Mid-2025 |
| Delaware court rules against Krafton | March 16, 2026 |
| Papoutsis announces May launch without Gill | March 17, 2026 |
| Contempt complaint filed | Post-March 17, 2026 |
Why It Matters
This is the first known case where a court has explicitly addressed a CEO using an AI chatbot to design a corporate strategy that was then executed and later ruled unlawful. The ruling does not say that consulting ChatGPT is illegal. It says that following ChatGPT's advice while ignoring your own corporate development team's warnings - and then firing people based on that advice - is a breach of contractual obligations and fiduciary duty.
The distinction matters. ChatGPT told Kim what he wanted to hear after he pushed past its initial "difficult to cancel" response. His own employee told him the truth: it'd trigger lawsuits. He chose the chatbot over the human. The court chose the human too.
A CEO asked ChatGPT how to avoid paying $250 million. The chatbot gave him a plan. His own team told him the plan would fail. He followed the chatbot. A Delaware judge reversed everything, reinstated the people he fired, extended the deadline he was trying to dodge, and named ChatGPT in the ruling. The $250 million is still owed. The CEO's reputation is not recoverable. And somewhere in OpenAI's logs, there's a conversation where an AI helpfully drafted a corporate takeover strategy that a court later dismantled line by line.
Sources:
- A Gaming CEO Asked ChatGPT How to Avoid Paying a $250 Million Bonus - Fortune
- South Korean Company Following ChatGPT Advice Forced to Backtrack - Tom's Hardware
- Krafton CEO's ChatGPT Legal Strategy Explained - TalkEsport
- CEO Ignores Lawyers, Asks ChatGPT How to Void $250M Contract - 404 Media
- ChatGPT Advised Exec on How to Fire Subnautica Founders - The Register
- Subnautica 2's Publisher Used ChatGPT for Legal Advice - Kotaku
- CEO's $250 Million ChatGPT Mistake - Inc.
