Update 16/03/2026: A Delaware Judge has ordered Krafton to reinstate Ted Gill as CEO of Unknown Worlds, ruling in favor of the Unknown Worlds co-founders. It's also worth noting that part of why the judge ruled in favor of the co-founders included the confirmation that Krafton CEO Changhan Kim did in fact use ChatGPT to try and get out of paying the bonus. Read the full story here.
Original Story:
Shortly after Krafton affirmed its commitment to becoming an "AI-first" company, the latest pre-trial document in the legal dispute between the co-founders of Subnautica developer Unknown Worlds alleges that Krafton's chief executive officer, Changham Kim, looked to ChatGPT to see if there was a way out of paying developers at Unknown Worlds their $250 million bonus that started this whole debacle.
The saga between the co-founders of Unknown Worlds (Charlie Cleveland, Ted Gill, and Max McGuire) and Krafton is one of 2025's longer and more surprising stories. It's doubtful that anyone could have predicted that we'd get the most legal drama from a case that has everything an onlooker could ask for; high financial stakes, the concept of a big company versus a small band of creators, and a fandom caught in the middle, unsure of which side to believe.
Krafton has made several claims about the co-founders, including that they abandoned their roles at Unknown Worlds, that they had stolen from Krafton and from Unknown Worlds, that they would have willingly sabotaged the reputation of the studio they founded just to receive a big payout.
The co-founders have hit Krafton with allegations of their own, like alleging that Krafton management was purposely sabotaging Unknown Worlds to delay Subnautica 2's early access launch in the hopes of Unknown Worlds missing its window to earn the $250 million bonus, and that CEO Changham Kim even admitted to the co-founders that it would be "disastrous" and "hugely embarrassing" for Krafton if it were to pay Unknown Worlds the massive bonus.
There's a full recap of events at the bottom of this article, with bullet points listing everything that has happened so far, with links to our coverage of it all if you want to catch up. For now, we'll stick with what's new, which deals in particular with that last allegation from the co-founders about Krafton CEO Changham Kim.
Though Krafton denies that Kim admitted it would be a financial disaster for Krafton should it have to pay the bonus, the pre-trial brief (publicly available via Game Developer) alleges that Krafton took direct steps to avoid paying the bonus not just for financial reasons, but because Kim felt it would be "a professional embarrassment" and that he and Krafton would be seen as "a pushover" if it paid the bonus.
The attempt to avoid the bonus was allegedly called "Project X," and the brief also alleges that firing the co-founders was part of Kim's attempts to avoid paying the bonus. Kim even went so far as to ask ChatGPT if there was a way out of paying the bonus, which tracks considering Krafton is trying to front itself as an AI and Generative AI-forward company.
"Desperate to avoid such a professional embarrassment," the pre-trial brief reads, "Kim obsessed over finding a way to avoid Krafton's obligation to pay the earnout. [Maria] Park told Kim that 'it seems to be highly likely that the earn-out will still be paid if the sales goal is achieved regardless of the dismissal with cause.'"
"Kim turned to artificial intelligence to help him brainstorm ways to avoid paying the earnout. ChatGPT likewise advised that it would be 'difficult to cancel the earn-out.' But Kim was undeterred."
The brief goes on to list Krafton's milestone check-ins with Unknown Worlds as the first step in what Kim believed to be the solution to his alleged problem, delaying the launch of Subnautica 2. Krafton would allegedly use the check-ins as the foundation to start its campaign that the game should be delayed.
That was only the beginning of 'Project X,' though, as the brief further alleges that Krafton's executive class was essentially planning a coordinated campaign to avoid paying the earnout by any and all means available to them, including seizing control of Unknown Worlds' website and social media channels and embarking on a "Take-Over Scenario" backup plan if the co-founders did not agree to Krafton's attempts to alter the earnout deal.
The brief also goes after one of Krafton's main claims about the co-founders, which is that they were allegedly abandoning their posts. Krafton has tried to use Charlie Cleveland's involvement in filmmaking as proof that he wasn't doing his job, but the pre-trial brief includes Slack messages that allegedly prove Krafton was fully aware of Cleveland's filmmaking efforts and was even considering making them an official part of his role as the potential for a Subnautica film grew.
Suffice to say, nothing in this pre-trial brief from the co-founders' legal team looks good for Krafton, though that's also what it's supposed to do. For Krafton's part, in a statement shared with Kotaku, the company denies the claims in the pre-trial brief and claims that its first commitment has always been to deliver "the best possible game to Subnautica fans."
"At the heart of every decision Krafton makes are the fans who deserve the best possible experience. Krafton made leadership changes at Unknown Worlds when the now-former executives focused on other priorities rather than Subnautica 2," the statement reads. "Despite Krafton offering to extend the former executives’ earnout period if they returned to their positions, the former executives refused to return to work, and improperly retained hundreds of thousands of Unknown Worlds and Krafton confidential documents both just before and after they were terminated."
"Additionally, they failed to preserve certain files after their employment ended. Through this court process, Krafton remains focused on what matters: delivering the best possible game to Subnautica’s fans. Krafton will continue to present the evidence proving that the former executives did not comply with their duties as the legal proceedings move forward."
Needless to say, this will be an extremely interesting case to follow once it gets to trial. We'll keep you updated on it as it continues to evolve.
If you need a recap on this whole saga, here's a timeline with everything save for today's news to catch you up:
- On July 2, it was reported that the founders of Unknown Worlds, Ted Gill, Max McGuire, and Charlie Cleveland, were fired and replaced by former Striking Distance Studios head Steve Papoutsis. No concrete explanation for their dismissal was offered at the time, with Krafton instead emphasizing its commitment to delivering a game that players deserved.
- On July 3, a statement from the Unknown Worlds website did its best to calm concerns from fans about the fact that the three original core creatives behind Subnautica were suddenly not at the studio.
- The next day, on July 4, the situation began to grow even more confusing, as Cleveland claims Subnautica 2 was "ready for early access release" and that his and his fellow co-founders' dismissals were "quite a shock."
- Five days later, on July 9, a report from Bloomberg adds a shocking allegation to the mix: that Krafton was delaying Subnautica 2 to avoid paying Unknown Worlds a $250 million bonus the studio would have been owed if they hit particular sales goals, which they would have done with Subnautica 2's launch. The delay was confirmed hours after the report went live, and Krafton held that the delay was due to Subnautica 2 not being ready, citing feedback from internal playtesting.
- On July 10, Krafton went on the offensive, blaming co-founders Gill, Cleveland, and McGuire, claiming they had "abandoned" their roles to pursue personal interests. Krafton also clarified that 90% of the aforementioned $250 million bonus would go directly to the co-founders, with the rest to be split among the employees. Gill, Cleveland, and McGuire held that they always intended to distribute the bonus to other employees.
- Also on July 10, Gill, Cleveland, and McGuire filed a lawsuit against Krafton.
- On July 11, an internal document from a milestone review of Subnautica 2's progress leaked on Reddit, seemingly showing further support to Krafton's claims that the game wasn't ready, citing a lack of content on top of previously mentioned internal playtest feedback.
- Over the following weekend on July 13, Krafton confirmed the documents to be real.
- A few days later, on July 17, when the co-founders' suit against Krafton became publicly available, we discovered allegations that Krafton had been sabotaging Subnautica 2 to ensure it would be delayed. There was even a claim that the CEO of Krafton met with the co-founders and admitted that having to pay out the $250 million bonus "could be disastrous financially and hugely embarrassing for Krafton." It also attacks every other claim Krafton had made up to this point, and that the feedback received on Subnautica 2 playtesting "unequivocally proved" the game was ready for an early access launch.
- Jumping ahead to August 12, Krafton shoots back at Gill, Cleveland, and McGuire's lawsuit, again arguing that the co-founders were absentee leaders who abandoned their roles, and continued to hold that the game wasn't ready for an early access launch.
- Eight days later, Unknown Worlds files its own separate lawsuit against its co-founders, telling Wccftech in an email that this suit "is a direct response to their misconduct, including the theft of confidential information and attempts to pursue personal financial gain to the detriment of the company's interests."
- On September 19, a report revealed that the court denied two of Krafton's motions, and Krafton seemingly U-turned on one of its key arguments regarding why the co-founders were fired in the first place.
- On September 24, new motions from Krafton alleged that the founders stole what Krafton called "effectively, a blueprint" for Subnautica in an attempt to further its argument that the co-founders intended to release Subnautica 2 on their own.
About the author: David has been writing about videogames, technology, and culture since 2020, with a focus on reporting daily news across multiple publications, including GameDaily.Biz, GameSkinny, and PlayStation Universe before joining Wccftech in 2025. David started contributing as Canada/US reporter for Wccftech's gaming section in 2025. Besides being up-to-date on the industry's movements, he loves interviewing developers, reviewing games, and writing intricate essays about the symbolism and layered meanings to be found in rich narratives as he's done for publications like GamesIndustry.Biz, LostInCult, and others. Outside of games he loves movies, music, theatre, his hometown, and his family, though not necessarily in that order.
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