Studio history
Krafton vs Unknown Worlds — the Subnautica 2 lawsuit
In 2021, Krafton acquired Unknown Worlds with a contract guaranteeing the founders a $250M earnout bonus tied to Subnautica 2's performance. In 2025, Krafton's CEO schemed to oust the founders to avoid the payout — even consulting ChatGPT for tactics. In March 2026, the Delaware Chancery Court ruled the firings a bad-faith scheme and ordered CEO Ted Gill reinstated.
The short version
Subnautica 2 launched into Early Access on May 14, 2026 under a legal cloud. Two separate "AI" stories often get conflated, so it's worth separating them up front:
- Krafton CEO Changhan Kim consulted ChatGPT for tactical advice on canceling the founders' earnout. Confirmed, in the court ruling.
- Allegations of generative AI in Subnautica 2's actual assets. Community speculation about creature designs / trailer art. Unknown Worlds has denied using generative AI for in-game content. [uncertain — official statement wording not fully verified]
The lawsuit and ruling are about thread 1, not thread 2.
Key people
- Charlie Cleveland — Co-founder, creative lead of original Subnautica. Fired July 2025. Still out.
- Max McGuire — Co-founder, technical lead. Fired July 2025. Still out.
- Ted Gill — CEO of Unknown Worlds. Fired July 2025. Reinstated by court order, March 2026.
- Changhan Kim — Krafton CEO. Named in the Delaware ruling as the principal actor in the scheme.
- Vice Chancellor Lori Will — Delaware Court of Chancery. Ruled against Krafton.
- Fortis Advisors LLC — Stockholder representative who filed the lawsuit on behalf of the selling shareholders (i.e., Cleveland, McGuire, and the rest of the 2021 sellers).
Full timeline
| Date | Event |
|---|---|
| Oct 2021 | Krafton acquires Unknown Worlds for ~$500M plus up to $250M earnout, contingent on Subnautica 2 hitting performance targets. The contract locks in founder operational control and a "for cause"-only termination clause. |
| 2023–2024 | Development progressing. Dev vlogs published. Subnautica 2 publicly announced (Dec 2023 earnings call). |
| May 2025 | Per the court's later findings: Krafton CEO Changhan Kim begins an internal campaign to delay Subnautica 2's launch. Internal communications surfaced in discovery describe the earnout as a "bad deal"; Kim complains he was "taken advantage of." |
| Jun 2, 2025 | Per the ruling: Kim turns to ChatGPT for advice on engineering a "takeover" and avoiding the earnout. The AI's response notes the earnout would be "difficult to cancel." |
| Jul 2025 | Krafton fires Cleveland, McGuire, and Gill. Krafton's public justification: the founders missed milestones and mismanaged the studio. |
| Jul 11, 2025 | Fortis Advisors files suit in the Delaware Court of Chancery, alleging the firings were a bad-faith scheme to deny the $250M earnout. Krafton counters with allegations that the founders "stole what amounts to a blueprint for Subnautica." |
| Late 2025 / early 2026 | Discovery surfaces Kim's internal messages and his ChatGPT consultation logs. |
| Mar 16, 2026 | Court ruling: Vice Chancellor Lori Will rules Krafton deliberately schemed to oust the trio. Orders Ted Gill reinstated as CEO with "full operational authority." Extends the earnout-earning period by 9 months. |
| May 14, 2026 | Subnautica 2 launches in Early Access — under the legal cloud, with Gill back in charge per court order. |
The two "AI" stories — kept separate
1. The CEO's ChatGPT use (confirmed)
Changhan Kim's consultation with ChatGPT for tactical advice on circumventing the earnout is documented in the court ruling and reported by Bloomberg, Kotaku, PC Gamer, and Game Developer. The AI told him the earnout would be hard to cancel. He proceeded anyway. The court used these logs as part of the evidence of bad-faith scheme.
This story is not about generative AI in Subnautica 2 itself. It is about a corporate executive using an AI tool while planning to oust founders.
2. Allegations of generative AI in the game's assets (community)
Mid-2025, Reddit and Twitter threads accused Unknown Worlds of using generative AI for creature concept art and trailer footage. Search-engine keyword volume for "subnautica 2 ai controversy" and "subnautica 2 ai trailer" spiked in this window. Unknown Worlds has publicly denied using generative AI for in-game content, though the exact wording of the official statement has not been fully verified for this page. [uncertain]
This thread fueled the "boycott Subnautica 2" sentiment in mid-2025 but appears to be largely separate from the Krafton lawsuit.
Boycott calls and reception
Following the firings in July 2025, portions of the Subnautica community called for a boycott in solidarity with Cleveland and McGuire. Sentiment shifted somewhat after the March 2026 court ruling reinstated Gill and validated the founders' position — but Cleveland and McGuire themselves remain out of the studio.
Whether the boycott materially impacted Early Access sales is unclear — early sales data is not yet public. [uncertain]
Current status (as of May 2026)
- Ted Gill: Reinstated as CEO (per court order).
- Cleveland and McGuire: Still out, but the lawsuit on the payout proceeds.
- Earnout window: Extended 9 months beyond the original deadline.
- Krafton: Remains publisher. Reputational damage significant.
- Subnautica 2: Launched in EA on May 14, 2026. Release date page.
What's still unresolved
- Whether Cleveland or McGuire have any path back to the studio.
- The final disposition of the $250M earnout (the suit is on the payout, not just the firings).
- Whether the boycott materially affected EA sales.
- The exact wording and date of Unknown Worlds' official statement on generative AI in the game's assets.
Sources
Primary: Delaware Chancery Court ruling. Secondary reporting: Bloomberg, Kotaku, PC Gamer, Game Developer, Game World Observer, Push Square. See individual citations in the underlying research file.
Related
Last updated: 2026-05-25.