Trending Now - Ceo's Use of Chatgpt for Legal Advice Leads to Costly Mistake

WHO:

Changhan Kim, CEO of Krafton

Charlie Cleveland, co-founder of Unknown Worlds Entertainment

Max McGuire, co-founder of Unknown Worlds Entertainment

Ted Gill, CEO of Unknown Worlds Entertainment

Delaware’s Court of Chancery Vice Chancellor Lori Will

WHAT:

Krafton was ordered by a US court to reverse the removal of the leadership of Unknown Worlds Entertainment.

Krafton had agreed to pay an additional $250 million bonus as part of a $500 million acquisition deal if the sequel, Subnautica 2, met certain sales targets.

The court ruled that Krafton improperly ousted the leadership without legitimate cause.

Ted Gill has been reinstated as CEO, with the authority to bring back the co-founders.

The earn-out period for the bonus has been extended due to the disruption caused by the leadership removal.

WHERE:

Krafton is a South Korean gaming company.

Unknown Worlds Entertainment is the studio behind the game Subnautica.

WHEN:

The acquisition of Unknown Worlds Entertainment by Krafton occurred in 2021.

The court ruling regarding the leadership removal occurred in March 2026.

The sequel, Subnautica 2, was preparing for release in 2025.

WHY:

Changhan Kim believed the bonus agreement was a “bad deal” and felt “taken advantage of”.

Kim sought legal advice from ChatGPT to avoid paying the $250 million bonus.

HOW:

Kim consulted ChatGPT for guidance on a corporate takeover strategy, which included forming an internal task force called “Project X”.

The AI suggested steps such as securing publishing rights on platforms like Steam and preparing legal defenses.

(UPDATED March 22, 2026 23:24 UTC)

In a significant ruling, a U.S. court has ordered Krafton to reverse the removal of the leadership at Unknown Worlds Entertainment, reinstating Ted Gill as CEO and allowing co-founders Charlie Cleveland and Max McGuire to return. The court found that Krafton improperly ousted the leadership without legitimate cause, and the earn-out period for a $250 million bonus tied to the sequel Subnautica 2 has been extended due to the disruption caused by this leadership change. This legal battle stems from Krafton CEO Changhan Kim's belief that the bonus agreement was unfavorable, prompting him to seek advice from ChatGPT on how to navigate the situation.