This CEO took legal advice from ChatGPT to avoid paying $250 million bonus. It backfired
A South Korean gaming giant that hatched a plan using ChatGPT to remove the heads of one of its own game studios in a bid to avoid paying $250 million has been ordered a US court to reverse the removal.Changhan Kim is the CEO of the South Korean gaming company Krafton. (LinkedIn/Changhan Kim)According to a report Fortune, the dispute traces back to Krafton’s $500 million acquisition of Unknown Worlds Entertainment in 2021, the studio behind the popular game Subnautica. As part of the deal, Krafton had agreed to pay an additional $250 million bonus if the sequel, Subnautica 2, met certain sales targets. The agreement also reportedly ensured that Unknown Worlds would operate independently, with co-founders Charlie Cleveland and Max McGuire, along with CEO Ted Gill, retaining control unless removed for valid cause.However, as the studio prepared for the sequel’s release last year, internal projections suggested the earn-out would likely be triggered.Krafton CEO Changhan Kim believed that it was a “bad deal” and felt “taken advantage of”. He was warned his legal team that the earnout would still need to be paid even if it was a “dismissal with cause” of the Unknown Worlds’ leadership. He was also reportedly warned that it would expose Krafton to “lawsuit and reputation risk”.This is when Kim turned to ChatGPT for guidance, the Fortune reported. “Fearing he had agreed to a ‘pushover’ contract, KRAFTON’s CEO consulted an artificial intelligence chatbot to contrive a corporate ‘takeover’ strategy,” Delaware’s Court of Chancery Vice Chancellor Lori Will wrote in a ruling.(Also Read:
