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A judge ordered the reinstatement of a video game developer after he was fired as part of a scheme cooked up by a CEO using ChatGPT. Facing the possibility of paying out a massive bonus to the developer of Subnautica2, the CEO of publisher Krafton used ChatGPT to create a plan to take over the development studio and force out its founder, according to court records.
The Monday ruling details the bizarre story. Unknown Worlds Entertainment is the studio behind the 2018 underwater survival game Subnautica. The company has since been working on the sequel, Subnautica 2. In 2021, South Korean publisher Krafton bought Unknown Worlds Entertainment for $500 million and promised to pay out another $250 million if Subnautica 2 sold well enough.
Kraftonâs internal sales projections for Subnautica 2 looked great, and looked like it would be on the hook for the additional $250 million. In an attempt to avoid paying this, Krafton CEO Changhan Kim turned to ChatGPT for help avoiding paying the developers the $250 million bonus. âAs Unknown Worlds prepared to release its hotly anticipated sequel, Subnautica 2, the partiesâ relationship fractured,â the court decision said. âFearing he had agreed to a âpushoverâ contract, Kraftonâs CEO consulted an artificial intelligence chatbot to contrive a corporate âtakeoverâ strategy.â
Kim partnered with Krafton Head of Corporate Development Maria Park and the companyâs legal team to work out options. He toyed with finding a reason to fire the founders. According to court records, Park pinged Kim on Slack and told him that attempting to avoid paying the bonus would be legally risky. âHi CEO . . . it seems to be highly likely that the earn-out will still be paid if the sales goal is achieved regardless of the dismissal with cause,â the Slack message said according to court records. âTherefore, there isnât much that we can practically gain other than punishment with a simple dismissal alone, whereas I am worried that we may be exposed to lawsuit and reputation risk.â
But the CEO would not accept defeat. âAnd so Kim turned to ChatGPT for help,â court records said. âWhen the AI chatbot responded that the earnout would be âdifficult to cancel,â Kim complained to Park that the [payout] was a âcontract under which we can only be dragged around.ââ
Kim pressed the chatbot for an answer. âAt ChatGPTâs suggestion, Kim formed an internal task force, dubbed âProject X.â The task forceâs mandate was to either negotiate a âdealâ on the earnout or execute a âTake Overâ of Unknown Worlds. They looked to buy time,â court records said. âKim sought ChatGPTâs counsel on how to proceed if Krafton failed to reach a deal with Unknown Worlds on the earnout. The AI chatbot prepared a âResponse Strategyâ to a âNo-Dealâ Scenario.â
This was a piece of ChatGPTâs âProject Xâ for Krafton:
âa. Preemptive Framing - Repeat that protecting quality and fan trust is the highest priority, undermine the âLarge Corporation VS. Indieâ framing
b. Securing Control Points -
* Lock down Steam/console publishing rights and access rights over code/build pipeline through both legal and technical aspects.
* For the earn-out freeze, keep room for negotiations through provision stating âimmediate removal if specific development results are achievedâ
a. Systematic materials for legal defense - Prepare contract interpretation memorandums, log all communications, seek external consultation
b. Team retention - Operation of retention packages for key personnel and rapid backfill pipelines in anticipation of resignation/departure scenarios
c. Two handed strategy - Create a structure that allows for both hardball (Legal+ Finance) and softball (Support/Incentives) approaches so moderate factions within Unknown Worlds can push for compromise.â
Kim followed ChatGPTâs advice rather than his lawyersâ advice, according to the court records. The first step was posting a message on Subanuticaâs website to get fans on his side. According to court documents, Kim said the goal of the message was to âsecure public support from fans and legal validation of our legitimacy.â He then suggested that ChatGPT write it for him. It achieved the opposite of his intended goal. Fans found the message bizarre and worried about the future of the game. Those fears were compounded when Kim fired the gameâs original creators and entered into a legal battle with them.
The legal battle is ongoing, but Kim looks set to lose. The judge has ordered he reinstate the fired developers and has exposed the CEOâs flailing use of ChatGPT. Krafton told Kotaku that it was âevaluating its optionsâ regarding the ruling and that it âputs players at the heart of every decision