The $250 Million Prompt and the Death of the Publisher
Krafton's CEO used ChatGPT to draft a hostile takeover of Unknown Worlds after his lawyers told him not to. Now he's losing the game, the studio, and his reputation.
Krafton paid $500 million for Unknown Worlds in 2021. They promised another $250 million when Subnautica 2 hit its milestones. When the bill came due, their CEO went to his lawyers and asked how to fire the founders and void the earnout before the check cleared. His lawyers told him it was a breach of contract and would invite catastrophic litigation.
So he opened ChatGPT and asked the bot instead.
This is the reality of Krafton’s attempt to swallow Unknown Worlds. Following a series of court filings in the Delaware Court of Chancery, we now know that Krafton CEO Chang-han Kim allegedly bypassed his own legal team to draft “Project X” — a secret hostile takeover strategy, AI-assisted — designed specifically to oust Unknown Worlds CEO Ted Gill and dodge a $250 million earnout.
The result: Krafton is losing. As of this month, Krafton has been scrubbed from the publishing credits of Subnautica 2. Unknown Worlds is self-publishing. The Delaware court handed them a reinstated CEO and a nine-month extension on that $250 million payday. The goose moved out and kept the house.
The earnout is the oldest trick in the corporate acquisition playbook. In 2021, Krafton bought Unknown Worlds for $500 million upfront, with an additional $250 million tied to performance and tenure milestones. The problem with earnouts in gaming is that the publisher usually controls the levers that determine whether those milestones get hit. If the payout is tied to a release date, the publisher can delay the game. If it’s tied to revenue, the publisher can inflate marketing costs. It is a structurally adversarial relationship disguised as a partnership, and everyone in the industry knows it.
According to court documents, Krafton allegedly began manufacturing reasons to delay Subnautica 2, pushing it outside the window where the $250 million earnout would apply. When Ted Gill and Unknown Worlds’ leadership pushed back, Krafton didn’t negotiate. They went to war.
“Project X” was the internal codename for the decapitation strike: fire Gill for “cause,” install Krafton loyalists, and dissolve the studio’s independence before the earnout window closed. When Krafton’s own legal counsel warned that firing Gill without legitimate reason would invite disaster, CEO Chang-han Kim reportedly turned to ChatGPT for a second opinion.
A CEO bypassed his own lawyers and asked an AI chatbot how to fire developers without getting sued. The chatbot, presumably, gave him an answer. The lawyers had too — and said don’t.
There is a specific kind of arrogance required to believe that an LLM can generate a legal loophole better than a firm that specializes in exactly this. Kim’s prompts reportedly looked for creative ways to terminate executives while maintaining plausible deniability regarding the earnout window. It is the sharpest possible illustration of what AI is actually being used for at the executive level: not to build things, but to avoid accountability for dismantling them.
Delaware’s Court of Chancery is not known for sentimentality. When the “Project X” documents surfaced — including the AI prompt trail — the court’s reaction was decisive. The judge granted a preliminary injunction reinstating Ted Gill as CEO and found that Krafton had intentionally created a hostile environment to force forfeiture of the earnout. To correct it, the court pushed the $250 million deadline back to September 15, 2026. Krafton tried to run out the clock. The judge added a fifth quarter.
The publishing rights are where it really lands. Subnautica 2’s Steam and Epic Games Store listings have been updated. Krafton is gone. Unknown Worlds is listed as both developer and publisher. This is the rare outcome where the studio actually wins — not just in court, but in practice.
Krafton paid $750 million for the Subnautica franchise. They may still hold equity. What they no longer hold is any ability to shape the future of the IP they tried to steal. That was taken from them by their own incompetence, preserved in a ChatGPT chat log that is now part of the public record of a Delaware court proceeding.
This is a warning to every independent studio looking at an acquisition as an exit. The earnout model is designed to look like partnership and function like leverage. Whether it’s Embracer Group collapsing under its own acquisition debt or Krafton plotting a palace coup with AI assistance, the pattern is the same: the check you were promised is the one they’re most motivated to take back.
The irony writes itself. Subnautica is a game about surviving in a hostile alien environment where everything is trying to eat you. The most dangerous thing in the ecosystem turned out not to be the deep-sea leviathans — it was the guy at the home office with a ChatGPT subscription and a $250 million reason to use it.
Unknown Worlds survived. They kept their CEO, their game, and their independence. Krafton is left holding a reputation that is sitting somewhere at the bottom of the Mariana Trench.
Sources: Game Developer · PC Gamer · Game Rant
