Subnautica 2 owner constantly relied on ChatGPT for legal strategy, judge says in scathing order: "Krafton followed most of ChatGPT’s recommendations"

Last year, the founders of Subnautica 2 developer Unknown Worlds, alongside CEO Ted Gill, were pushed out of the studio by parent company Krafton. The trio sued Krafton, alleging they had been let go so they wouldn't be able to claim $250 million dollars worth of bonuses for delivering the game. According to the same judge's opinion that reinstated Gill today, Krafton CEO Kim Chang-han relied on ChatGPT for advice on how to take over Unknown Worlds.

In the leadup to the originally planned early access launch of Subnautica 2, the relationship between Krafton and Unknown Worlds "fractured," according to a 91-page ruling from judge Lori W. Will (via Bloomberg Law). "Internal projections showed the new title generating significant revenue that would easily trigger the earnout," Will says. "Fearing he had agreed to a 'pushover' contract, Krafton's CEO consulted an artificial intelligence chatbot to contrive a corporate 'takeover' strategy."

Kim wanted out of what he saw as a "bad deal" with the heads of Unknown Worlds, according to the ruling, and sought to contrive a reason to fire them. According to the same ruling, Maria Park, Krafton's head of corporate development, "warned Kim over Slack that a 'dismissal with cause' would not eliminate the earnout obligation, while exposing Krafton to 'lawsuit and reputation risk.'"

"And so Kim turned to ChatGPT for help," the judge writes. "When the AI chatbot responded that the earnout would be 'difficult to cancel,' Kim complained to Park" that the purchase agreement with Unknown Worlds, which set the parameters of that $250 million payout, was "a contract under which we can only be dragged around."

"At ChatGPT's suggestion, Kim formed an internal task force, dubbed 'Project X,'" the ruling continues. "The task force's mandate was to either negotiate a 'deal' on the earnout or execute a 'Take Over' of Unknown Worlds."

As the human parts of Project X, including Krafton's head of strategy and operations Richard Yoon, did their work, "Kim sought ChatGPT's counsel on how to proceed if Krafton failed to reach a deal with Unknown Worlds on the earnout. The AI chatbot prepared a 'Response Strategy to a 'No-Deal' Scenario,' which Kim shared with Yoon. The strategy included a 'pressure and leverage package' and an 'implementation roadmap by scenario,'" as well as a "key summary of responses" for the next steps Krafton should take.

"Over the next month, Krafton followed most of ChatGPT’s recommendations," the judge writes. Those actions included "preemptive framing," which involved an effort to "repeat that protecting quality and fan trust is the highest priority" and "undermine the 'Large Corporation VS. Indie' framing" in players' minds. That resulted in things like the community-focused response Krafton published on its website.

"It stated: 'To our 12 million fellow Subnauts . . . . We have asked the series’ creators—Charlie Cleveland and Max McGuire—to once again helm the journey' to Subnautica 2. It also stated (falsely) that 'Charlie and Max [we]re considering [Krafton’s] invitation.' Gill and the Unknown Worlds team were shocked, since they had 'nothing to do with' the message, which Krafton had posted 'overnight.'"

Krafton also followed the chatbot's advice in "securing control points" by locking down access to Unknown World's Steam publishing rights, which offered the only way for the studio to publish Subnautica 2.

Kim's use of ChatGPT for advice in the dispute with Unknown Worlds has come up in the past, when he said in earlier hearings that he used the chatbot to get "faster answers to figure out what kind of rights we have." Given that the judge in this case seems to have very much sided with the former Unknown Worlds heads, it seems this might serve as a lesson not to lean on ChatGPT for legal advice. I'd think that would be obvious, but hey, if the CEO of a billion-dollar company had to learn the hard way, maybe you need the reminder.

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