New Delhi | The CEO of South Korean gaming company Krafton, Changhan Kim, has found himself embroiled in an unusual legal dispute. The case dates back to 2021, when Krafton acquired Subnautica developer ‘Unknown Worlds Entertainment’ for $500 million. The deal included a clause stating that if the company achieved certain targets, Krafton would owe its leaders an additional $250 million (approximately ₹2,100 crore) in bonuses.
When the time came to pay the bonuses, Kim realized he had entered into a high-risk agreement. Instead of consulting experienced lawyers, he turned to the AI chatbot ChatGPT. The AI suggested that the company create an internal task force called ‘Project X,’ tasked with either pressuring to reduce the bonus or replacing the company’s management. When the leaders of Unknown Worlds refused to amend the bonus terms, their positions were altered as part of the strategy.
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The matter reached a Delaware court. The judge expressed astonishment at the plan and ruled that Krafton’s actions were improper. The court ordered that the removed executives be reinstated and the decision be overturned. The judgment clarified that AI can assist in corporate strategy, but it cannot replace professional legal counsel for complex financial and legal decisions.
Krafton stated that it respects the court’s decision, although it disagrees with the ruling and is considering next steps. The company also emphasized that its focus remains on improving games and enhancing the player experience.
The incident provides a crucial lesson for the global corporate world. Experts note that AI chatbots can be helpful for information gathering, but relying on them for strategic business or legal decisions can lead to serious consequences.
The Krafton case further demonstrates that plans devised with AI can suffer from a lack of transparency and ethical oversight, potentially leading to severe repercussions. Ignoring contractual obligations and employees’ rights can trigger legal action that damages both the company’s reputation and financial stability.
The case highlights the challenge of balancing AI and corporate governance. It underscores that companies should not over-rely on technology for complex financial decisions and must never bypass professional legal guidance.
For other gaming and tech companies worldwide, the Krafton episode serves as a warning: AI tools are advisory, not decisive. Misuse can result not only in financial loss but also in reputational harm affecting both employees and the organization.
The investigation and court ruling confirm that AI-based strategies are not completely secure and must always be implemented alongside professional legal and financial consultation.
