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NOPE
Medium reported severity

Krafton and Unknown Worlds: game studio executives terminated in a takeover campaign that followed a CEO's ChatGPT strategy, court finds no valid cause

A Delaware Court of Chancery opinion of 16 March 2026 finds that in June 2025 the CEO of Krafton, after being warned that a dismissal with cause would not eliminate a contingent earnout obligation, consulted ChatGPT, obtained a "Response Strategy to a No-Deal Scenario" and followed most of its recommendations over the next month. Krafton locked the studio out of its game publishing platform, posted a message on the studio's websites, and on 1 July 2025 sent termination letters to the studio's two founders and its CEO. The court held the terminations were without valid Cause, reinstated the studio's CEO and extended the earnout period. The opinion does not find that ChatGPT recommended the terminations. Money damages are reserved for a second phase.

AI system
ChatGPT
OpenAI
Occurred
Jun 2025
Reported
16 March 2026
Event location
Unknown
What the AI did
Relation unknown
Reported harm
Professional Harm
Whose AI use
An institution’s AI use
Setting
Work
Evidence
AI involvement supported · Causal attribution unclear · 1 source
7 claims: 7 documented. 7 open questions
People reported harmed
3 people

AI system as recorded: ChatGPT (OpenAI)

Reported harm

The court opinion finds three executives were terminated without valid Cause and had operational control taken from them, and reinstates one as CEO. Money damages, including for the earnout, are reserved for a second phase.

What remains unknown

  • The date of the CEO's first ChatGPT use is not given beyond the sequence in the opinion (a legal warning on 2 June 2025 followed by the ChatGPT consultation). The incident date is the month.
  • The content of the deleted ChatGPT chat is unknown.
  • Whether ChatGPT recommended or was asked about terminating the executives is not stated in the opinion.
  • Money damages, including whether the earnout was wrongfully impaired, are reserved for Phase Two.
  • Appeal status is unknown.
  • Where the executives lived and worked is not stated in the inspected passages.
  • The Reuters article listed in the AIID entry returned HTTP 401 and was not read.

What the evidence supports

AI involvement: supported. The court opinion finds Krafton's CEO consulted ChatGPT, that it prepared a "Response Strategy to a No-Deal Scenario", and that Krafton followed most of its recommendations. The relevant first chat log was deleted by the CEO, so the record on the chatbot's first replies is limited to Slack messages.

7 claims: 7 documented. What the statuses mean

Documented On 16 March 2026 the Delaware Court of Chancery entered judgment that Krafton breached the acquisition agreement by terminating the three Key Employees without valid Cause and by improperly seizing operational control of the studio.

Causal attribution. Phase One judgment on the contract claims. The court reserves damages for a second phase and does not decide whether the earnout was wrongfully impaired.

Documented The court found that after the Head of Corporate Development at Krafton warned the CEO that a dismissal with cause would not eliminate the earnout obligation, the CEO turned to ChatGPT, and that the CEO told the Head of Corporate Development in a Slack message that ChatGPT answered the earnout would be difficult to cancel.

Causal attribution. Findings of fact drawn from Slack messages and trial testimony. The chat itself was deleted.

Documented The court found that ChatGPT prepared a "Response Strategy to a No-Deal Scenario" recommending, among other steps, preemptive public framing, locking down publishing rights and access to the build pipeline, legal defense materials and team retention, and that Krafton followed most of these recommendations over the next month.

Causal attribution. The opinion lists the strategy items and the steps Krafton took. The listed strategy does not include dismissing the executives. The dismissal decision is Krafton's.

Documented The court found that Krafton locked Unknown Worlds out of its Steam publishing rights, which the court found severed the studio's practical ability to launch its game, posted a message on the studio websites without the studio's involvement, and on 1 July 2025 sent termination letters citing a single ground.

Causal attribution. Court findings of fact. The opinion links the lockdown to ChatGPT's recommendation and does not state that ChatGPT recommended the July terminations.

Documented The court found Krafton's later justifications for the terminations (semi-retirement of two founders and data downloads) were pretextual.

Causal attribution. Judicial finding after an expedited trial. Krafton's arguments are its litigation positions.

Documented The court reinstated the CEO of Unknown Worlds, enjoined Krafton from impeding the studio CEO's authority over the game's early access launch, and extended the base earnout Testing Period by 258 days.

Causal attribution. Specific performance remedy. The court declined to return the two founders to their earlier roles.

Documented The CEO admitted at trial to deleting relevant ChatGPT logs, including the particular chat in which the earnout question was put to the chatbot.

Causal attribution. A limit on the record. It bears on what the chatbot said, not on the court's findings about the terminations.

Sources

1 source inspected. Sources that repeat one account do not corroborate each other.

How the sources were read, and where the events happened

Event countries: Unknown. Affected-person countries: Unknown. Court countries: United States.

The opinion is from the Delaware Court of Chancery. It describes Krafton as a South Korean company and does not state where the executives were located when terminated, so event and affected-person countries are left unknown.

Reviewed for publication 2026-09-29: The full Delaware Court of Chancery opinion (90 pages) was read for the ChatGPT passages, the termination chronology and the conclusion. Claims are court findings, so they are documented as findings of that record. The affected executives are described by role.

People reported harmed in this case

3 people

0 AI participants · 3 other people harmed

The opinion finds three Key Employees (two founders and the CEO) were terminated without valid Cause. Former shareholders represented by the plaintiff, studio staff and players are not counted.

Counted once within this case. The same person may appear in other cases. This count does not establish AI causation.

Cite this case

Compiled per our published methodology: verification statuses, sourcing standards, and corrections process.

APA

NOPE. (2026). Krafton and Unknown Worlds: game studio executives terminated in a takeover campaign that followed a CEO's ChatGPT strategy, court finds no valid cause. AI incidents. https://nope.net/incidents/2025-krafton-unknown-worlds-executives-terminated-after-chatgpt-takeover-strategy

BibTeX

@misc{2025_krafton_unknown_worlds_executives_terminated_after_chatgpt_takeover_strategy,
  title = {Krafton and Unknown Worlds: game studio executives terminated in a takeover campaign that followed a CEO's ChatGPT strategy, court finds no valid cause},
  author = {NOPE},
  year = {2026},
  howpublished = {AI incidents},
  url = {https://nope.net/incidents/2025-krafton-unknown-worlds-executives-terminated-after-chatgpt-takeover-strategy}
}

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