Hyperscaler server hardware provider Wiwynn has sued Company X (formerly Twitter). According to Datacenter Dynamics, the Taiwanese vendor accuses the counterparty of refusing to pay $120 million under a contract for the supply of servers and demands compensation in the amount of $61 million. It is alleged that after the purchase of Twitter by Elon Musk, the social network “suddenly stopped” paying and began to ignore requests for payment for finished products.
As part of the agreement with X, the company purchased components for servers worth $120 million, which were never delivered to the customer. At the same time, the social network, at the direction of Musk, began to reduce cloud costs and close data centers in order to pay off debts associated with its purchase. Wiwynn was able to cancel orders or return components worth approximately $59 million, but is now seeking $61 million in compensation.
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Twitter left its data center in Sacramento, which Tesla eventually acquired, and reduced capacity in Atlanta, Georgia. Moreover, in Georgia, Musk achieved tax breaks for infrastructure expansion. At the same time, the company refused to pay Google Cloud and Oracle Cloud bills, and also stopped payments to AWS – until Amazon refused to pay for advertising on the social network. The exodus from Sacramento, according to the company, allowed Twitter to save $100 million a year.
Musk’s business is desperately fighting off multiple lawsuits, including those filed by former CEO Parag Agarwal for $128 million and former chairman Omid Kordestani for $20 million, losing their jobs. However, last month Musk already won a case against former Twitter employees who demanded $500 million in compensation for mass layoffs.