A U.S. court has ordered South Korean game publisher Krafton to reinstate the leadership of Unknown Worlds Entertainment, the studio behind the Subnautica series, following a dispute over a potential $250 million performance bonus. Court documents revealed that Krafton CEO Changhan Kim consulted the artificial intelligence chatbot ChatGPT to devise a strategy to avoid the payment.
Acquisition and Earnout Agreement
Krafton acquired Unknown Worlds Entertainment in 2021 for $500 million. The acquisition agreement included an earnout clause, promising an additional payment of up to $250 million to the studio if Subnautica 2 achieved specific sales performance targets.
The agreement stipulated that Unknown Worlds would maintain its independence, and its leadership—co-founders Charlie Cleveland and Max McGuire, and CEO Ted Gill—would retain operational control, terminable only for cause.
Internal Projections and ChatGPT Involvement
In the lead-up to the release of Subnautica 2, Krafton’s internal sales projections indicated a high likelihood that the game would reach the threshold triggering the $250 million payment. According to the ruling by Vice-Chancellor Lori Will of the Delaware Court of Chancery, CEO Changhan Kim viewed the earnout as a "bad deal."
Despite warnings from his legal department about the necessity of the payment and the potential for lawsuits and reputational damage, Kim consulted ChatGPT. The chatbot initially indicated the earnout would be "difficult to cancel." However, following a suggestion from ChatGPT, Kim established an internal task force named "Project X."
The task force’s objectives included negotiating a settlement on the earnout or executing a "Take Over" of Unknown Worlds. Krafton subsequently implemented most of ChatGPT's recommendations, including developing a communications strategy, securing publishing rights for Subnautica 2, and preparing legal defense materials.
Leadership Removal and Court Ruling
After failing to renegotiate the earnout, Krafton removed the studio’s leadership, alleging they had misrepresented their time commitment to the studio. The judge rejected this claim.
The court ordered that operational control be returned to Ted Gill, the CEO of Unknown Worlds. The court also extended the period during which the earnout criteria could be met to September 15, 2026, to account for the period when Gill was not CEO. Unknown Worlds’ founders also have the option to extend the deadline to March 2027 if they notify Krafton in writing.
Krafton has stated its disagreement with the ruling and is currently evaluating its legal options.
Subnautica 2 Launch and Current Status
Subnautica 2 entered early access on March 17, 2025. Publisher Krafton reported selling one million copies within the first hour of release. As of April 2025, Krafton was no longer listed as Subnautica 2's publisher on Steam. A Krafton representative stated that the company is focused on supporting the early access launch and had nothing further to share.