In Fortis Advisors, LLC v. Krafton, Inc., No. 2025-0805-LWW (Del. Ch. Mar. 16, 2026), Delaware Vice Chancellor Lori W. Will, finding that Defendant “Krafton followed most of ChatGPT’s recommendations” to eventually terminate the key employees of their subsidiary Unknown Worlds, ordered the equitable reinstatement of the CEO, restored his access to the Steam publishing platform, extended the contractual earnout testing period, and deferred remaining questions regarding monetary damages to a subsequent phase of litigation.
Case Discussion and Judge’s Ruling
In this case where Krafton purchased Unknown Worlds in October 2021, the agreement called for a potential earnout payment if certain conditions were met that could yield as much as $250 million to employees of Unknown Worlds. A milestone review meeting made it clear that the Unknown Worlds team was on target for a successful August 2025 early access launch of their game Subnautica 2, with “over 1.67 million copies sold by Q4 2025”, that could yield an earnout payment of between a $191.8 million and $242.2 million.
Krafton’s CEO, Changhan (CH) Kim, concerned about the size of the earnout payment, turned to ChatGPT for help. When ChatGPT responded that the earnout would be “difficult to cancel,” Kim complained to Maria Park (Krafton’s Head of Corporate Development) that the EPA was “a contract under which we can only be dragged around.” He expressed frustration that Unknown Worlds had the “authority to determine the release date and determine publishing” without Krafton’s involvement. Kim asked Park to reach out to the Legal Department and to call him. Moments later, Park sent Kim the section of the EPA discussing the Key Employees’ “operational control” over Unknown Worlds for so long as “any Key Employee is employed by the Company.”
At ChatGPT’s suggestion, Kim formed an internal task force, dubbed “Project X.” The task force’s mandate was to either negotiate a “deal” on the earnout or execute a “Take Over” of Unknown Worlds. Eventually, Kim sought ChatGPT’s counsel on how to proceed if Krafton failed to reach a deal with Unknown Worlds on the earnout. ChatGPT 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.” It also suggested a “key summary of responses” Krafton could deliver to the Key Employees:
Key Summary of Responses
a. Preemptive Framing – Repeat that protecting quality and fan trust is the highest priority, undermine the ‘Large Corporation VS. Indie’ framing
b. Securing Control Points –
* Lock down Steam/console publishing rights and access rights over code/build pipeline through both legal and technical aspects.
* For the earn-out freeze, keep room for negotiations through provision stating “immediate removal if specific development results are achieved”
a. Systematic materials for legal defense – Prepare contract interpretation memorandums, log all communications, seek external consultation
b. Team retention – Operation of retention packages for key personnel and rapid backfill pipelines in anticipation of resignation/departure scenarios
c. Two handed strategy – Create a structure that allows for both hardball (Legal+ Finance) and softball (Support/Incentives) approaches so moderate factions within Unknown Worlds can push for compromise.198
In a footnote, Vice Chancellor Will noted: “Kim admitted at trial that he had deleted specific, relevant ChatGPT logs… This particular chat was deleted.”
Over the next month, Krafton followed most of ChatGPT’s recommendations, which included “preemptive framing” by taking the fight directly to Unknown Worlds’ fans, locking down Steam publishing rights to ensure Unknown Worlds could not publish Subnautica 2, and preparing “systematic materials for legal defense.”
Those steps forced Ted Gill (Unknown Worlds’ President) to the negotiating table, but when the negotiations stalled, Krafton sent termination letters to Unknown Worlds’ Key Employees, removing them from their positions effective July 31.
In considering all the factors (including the fact that the Key Employees initiated large-scale data downloads of Unknown Worlds’ company files and data when they anticipated being terminated), Vice Chancellor Will stated: “I find in Fortis’s favor. The Key Employees were not terminated for Cause as defined in the EPA and thus retained operational control of Unknown Worlds. None of Krafton’s proffered justifications have merit. To remedy Krafton’s breaches, I grant a tailored specific performance remedy outlined in Section III below.”
Finding that “the Key Employees executed a bulk download defensively to protect records during a mounting corporate crisis” and that “the Key Employees subsequently returned all of the downloaded files to Krafton upon its request”, Vice Chancellor Will ordered the equitable reinstatement of the CEO, restored his access to the Steam publishing platform, extended the contractual earnout testing period, and deferred remaining questions regarding monetary damages to a subsequent phase of litigation.
So, what do you think? Are you surprised that the CEO followed ChatGPT’s recommendations to try to void the deal? Please share any comments you might have or if you’d like to know more about a particular topic.
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