Court Orders Krafton to Reinstate Studio Leadership After CEO's Failed ChatGPT Scheme to Avoid $250M Bonus
Key Takeaways
- ▸A US court ordered Krafton to reinstate Unknown Worlds' leadership after the CEO used ChatGPT to devise a plan to remove them and avoid a $250 million earnout payment
- ▸Krafton's legal team had warned CEO Changhan Kim that dismissing leadership would still trigger the earnout obligation and expose the company to legal and reputational risk, which he disregarded
- ▸ChatGPT recommended forming an internal taskforce to either renegotiate the earnout or execute a 'takeover' of Unknown Worlds, with the AI suggesting a specific action plan that Krafton largely followed
Summary
A Delaware court has ruled that South Korean gaming publisher Krafton must reinstate the leadership of Unknown Worlds Entertainment after CEO Changhan Kim used ChatGPT to devise a plan to remove them and avoid paying a $250 million earnout bonus. The dispute stems from Krafton's 2021 acquisition of Unknown Worlds for $500 million, which included an agreement to pay up to $250 million in earnouts if the studio met certain performance targets. Vice-Chancellor Lori Will found that Kim, believing the deal was unfavorable, consulted ChatGPT for strategies to circumvent the earnout obligation, ultimately following most of the AI's recommendations in forming an internal "Project X" taskforce. The court rejected Krafton's claim that studio leadership had deceived the company about time spent on the project, ordering operational control be returned to CEO Ted Gill and extending the period for earnout criteria to be met.
- The judge rejected Krafton's allegations that studio leadership deceived the company, finding no valid cause for their removal
