Description: A Delaware Chancery opinion found that, after being warned that firing Unknown Worlds leaders would not eliminate earnout obligations, Krafton's CEO turned to ChatGPT for a "no-deal" strategy and then followed most of its recommendations. The court tied that strategy to Krafton's lockout of publishing control, unilateral public messaging, wrongful termination of Ted Gill, Charlie Cleveland, and Max McGuire, and seizure of studio control.
Editor Notes: See also: https://courts.delaware.gov/Opinions/Download.aspx?id=392880. Timeline notes: (1) 06/02/2025, Krafton's CEO turned to ChatGPT for a strategy to avoid the contractual consequences of the Unknown Worlds earnout. (2) 07/01/2025 (the incident ID date), Krafton terminated Ted Gill, Charlie Cleveland, and Max McGuire and seized operational control of the studio. (3) 03/16/2026, the Delaware Court of Chancery found the terminations pretextual, reinstated Gill, and extended the earnout period. (4) The incident ID was created 04/11/2026.
Entities
View all entitiesAlleged: OpenAI developed an AI system deployed by Krafton and Changhan (CH) Kim, which harmed Unknown Worlds Entertainment , Ted Gill , Max McGuire , Former shareholders of Unknown Worlds Entertainment and Charlie Cleveland.
Alleged implicated AI system: ChatGPT
Incident Stats
Incident ID
1449
Report Count
1
Incident Date
2025-07-01
Editors
Daniel Atherton
Incident Reports
Reports Timeline
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WILMINGTON, Delaware, March 16 (Reuters) - A Delaware judge ordered on Monday that South Korean game developer Krafton Inc (259960.KS), opens new tab reinstate the head of one of its video game studios, ruling he had been improperly remove…
Variants
A "variant" is an AI incident similar to a known case—it has the same causes, harms, and AI system. Instead of listing it separately, we group it under the first reported incident. Unlike other incidents, variants do not need to have been reported outside the AIID. Learn more from the research paper.
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