Stop me if you’ve heard this one before: A CEO goes to ChatGPT to cheat on a legal contract and gets hoisted on his own petard. Perhaps it’s an old song sung for a new day and age, but it’s a truth worth telling.

A Delaware judge ruled that game publisher Krafton breached its acquisition deal with Unknown Worlds after company CEO Changhan Kim used the chatbot as de facto stand-in attorney in an attempt to weasel out of the contract that would have paid the studio $250 million if they met certain earnings metrics.

Unknown Worlds is best known for creating Subnautica, a popular underwater survival game that became a cultural phenomenon almost overnight. Gamers swam waters amidst colorful fish, built palatial bases and explored a variety of environments, discovering beautiful and dangerous aquatic life. The game itself sold over 17.5 million copies and exceeded $300 million in gross revenue.

Krafton, of PUBG shooter fame, sought to purchase Unknown Worlds in 2021 for $500 million upfront, plus $250 million with the promise that studio’s two co-founders and its CEO would retain control of their company. By 2025, Subnautica 2 was already slated for early access mid-year and looked like it would meet earnings projections to hit the metrics needed for the $250 million payout.

Instead of listening to his legal team, Kim turned to ChatGPT to figure out how to avoid paying such a significant sum. Obediently, the chatbot laid out a plan that included a company takeover scenario that would either work or land Kim in hot water.

Following ChatGPT’s instructions Kim fired the leadership team of Unknown Worlds, yanked access to Steam, and locked down distribution channels for Subnautica 2.

The logic was straightforward, if ruthless: no distribution, no sales; no sales, no metrics; no metrics, no $250 million. By July 2025, the expected early access was delayed amid the legal troubles with Krafton and Subnautica 2 didn’t ship on time.

Needless to say, the court found none of this behavior amusing. Let alone using a chatbot in lieu of actual legal advice.

In this case, Kim’s own deleted chats with the chatbot sank him. Framing the courtroom drama, the judge ruled that consulting ChatGPT did not qualify for attorney client privilege as the chatbot was not his attorney and in fact involved a third party: OpenAI.

The court used the chats as a window into Kim’s intent and turned them against him.

During the trial, Kim said, “I used it like any other search engine to explore options,” but the court did not find his argument compelling.

Although chatbots are increasingly present in legal practice, they must be used in confidence and by the actual lawyers of record for privilege to attach. This is a critical difference in the law that is currently under development in the law that Kim blundered wildly with AI and paid for it.

In the midst of all this, Subnautica 2 early access is back on track and set for May 2026!

Image: ChatGPT / Vox Ex Machina