Changhan Kim, CEO of South Korean gaming company Krafton, consulted ChatGPT while trying to find ways to avoid paying a potential $250 million payout bonus to the leadership of Unknown Worlds Entertainment, The Guardian reported. Kim's idea of using a chatbot for such crucial decision-making not just backfired, but it has become an example of the risks of using AI for complex corporate and legal decisions, after a judge in Delaware ordered the company to reverse the removal.
"Fearing he had agreed to a 'pushover' contract, KRAFTON's CEO consulted an artificial intelligence chatbot to contrive a corporate 'takeover' strategy," Delaware's Court of Chancery Vice Chancellor Lori Will wrote in a ruling on Tuesday.
Also read | Staff Monitoring In Chinese Companies Reaches New Level With Smart Seats, Cameras
KRAFTON acquired Unknown Worlds Entertainment, the makers of the Subnautica video game, for $500 million in 2021. It reported that Krafton would pay them an earnout worth up to $250 million, if they met certain targets.
-
Is AI Bubble Waiting To Burst? Nikhil Kamath Warns Of Tougher Months Ahead -
"We Don't Have 5 Years": Celebrated American General Sounds Alarm On War -
"There Will Be Issues Between Big Countries": S Jaishankar On India-China -
Neha Goyal Makes Stunning Asian Games Gold Revelation At NDTV World Summit 2026 -
Big NDTV Summit Impact: RBI Governor's Tata Sons Listing Remark Makes Top Newspaper Headlines -
"Certainty Is A Problem": Nikhil Kamath On Marriage, Children And Future -
"High Inflation Is Like Tax On Everyone": RBI Governor At NDTV World Summit -
RBI Governor Sanjay Malhotra's Big Hint On Tata Sons Listing Row At NDTV World Summit -
The Mystery Of A Bare Nail In Ashwini Vaishnaw's Office -
To PM Modi's "Failed Product" Jab At Rahul Gandhi, A Shashi Tharoor Counter
Internal projections suggested the upcoming release of Subnautica 2 would trigger the payout. So, it wanted to exit the deal.
Instead of following a traditional legal strategy, the company relied on arguments generated with the help of AI tools. As per reports, ChatGPT suggested that Kim form an internal task force, dubbed 'Project X'.
When he was unable to get the leadership to renegotiate the earnout, Krafton removed them. However, the strategy did not hold up in court.
The Delaware judge ruled that the company had acted improperly in trying to terminate the agreement. "The task force's mandate was to either negotiate a 'deal' on the earnout or execute a 'Take Over' of Unknown Worlds," Will stated. "They looked to buy time."
Also read | Man Shares Frustration With Domestic Help Taking Planned Sick Leaves, Internet Reacts
What did the company say?
"KRAFTON puts players at the heart of every decision, and that will never change. Over the past several months, KRAFTON and the Unknown Worlds team have worked tirelessly to strengthen the game and prepare it for an Early Access release," a KRAFTON spokesperson told Fortune.
"While we respectfully disagree with today's ruling, we are evaluating our options as we determine our path forward. Today's ruling does not resolve the former executives' claim for damages or an earnout related to Subnautica 2, with further litigation still pending."
The case quickly drew attention in corporate and legal circles because it showed how companies are increasingly experimenting with AI tools like ChatGPT for critical decision-making.
Experts have also warned that AI should not be treated as a substitute for professional legal advice.
Track Latest News Live on NDTV.com and get news updates from India and around the world