Subnautica lawsuit: CEO used ChatGPT to plot a takeover of the studio in order to default on $250 million.

In March 2026, a Delaware court ruled on one of the most bizarre legal cases in the history of the gaming industry. The case revolved around independent developer Unknown Worlds – the creator of the survival blockbuster Subnautica – and its parent company Krafton .

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From a $500 million deal to a smear campaign, Unknown Worlds was founded in 2001 by Charlie Cleveland, Ted Gil, and Max Maguire. After a decade of struggling financially and nearing bankruptcy, the studio reached its peak with Subnautica, selling over 18 million copies by 2026. This resounding success attracted Krafton, leading to a $500 million acquisition of the studio in October 2021, along with a promise to release Subnautica 2 in 2025.

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However, trouble struck when Krafton abruptly fired the entire founding team of Unknown Worlds. Krafton launched a public smear campaign, implying that the founders failed to meet deadlines, were frequently absent to work on personal projects, and thus the game did not meet quality standards. Immediately, the founding team filed a lawsuit against Krafton CEO CH Kim, accusing the company of wrongfully firing them to avoid a massive $250 million bonus – the amount stipulated in the contract to be paid when Subnautica 2 entered Early Access. In response, Krafton filed a countersuit, announcing a delay in the game's release and demanding a reduction in the bonus to only 10% ($25 million). The most ridiculous aspect of the case was revealed during the litigation: CEO CH Kim directly used the artificial intelligence tool ChatGPT to orchestrate this entire hostile takeover plot. Krafton's CEO considered the $250 million deal a shameful mistake and sought to reverse it. Despite clear warnings from his legal team that firing him would not erase his bonus obligations and would put the company at risk of litigation and reputational damage, the CEO ignored them all.

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Instead, he went on ChatGPT and was "co-opted" by the AI ​​to devise a plan called "Project X." This shadowy campaign included steps such as: completely taking over Unknown Worlds, gathering evidence, isolating the developers from public opinion, and outlining a media strategy to manipulate fans. Even Krafton's statements about "putting the player experience first" were actually just AI-generated words to cover up the plot to seize control of the Subnautica 2 project.

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The existence of the "Project X" scheme was exposed and brought to light during the trial of the Unknown Worlds founders and Krafton in a Delaware court. These details subsequently became evidence against Krafton in court. Justice served, and a costly lesson for independent game developers. The Delaware judge did not hesitate to expose Krafton's scheme, clearly concluding that they had deliberately fired the leadership team to avoid paying the bonus. The court ruled that Krafton must immediately reinstate the founding members, restoring their full control of the studio and the Subnautica 2 project, and extending the deadline for receiving the $250 million bonus to 2027.

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This event was not only a rare happy ending but also left a profound cautionary lesson for the entire industry. It demonstrated that promises of "stability" or "financial security" when selling to large corporations are often just an illusion. When independent developers trade their freedom for patronage from those who only care about profit figures, they can become victims of the very shareholders and CEOs of the parent company – those who are willing to destroy an entire studio to protect their own positions. Ultimately, the only and most valuable protection for game developers is the talent and reputation they have built themselves.