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A hot potato: Controversial billionaire Elon Musk is once again facing legal troubles following his acquisition of Twitter, which he rebranded as X. The social network has allegedly failed to pay for custom server hardware and now an Asian supplier is seeking a jury trial to recover the costs.
Infrastructure manufacturer Wiwynn has filed a lawsuit against X for $120 million in unpaid hardware bills. The Taiwanese company provided custom hardware solutions for the social network over an 8-year period under a “Master Purchase Agreement” signed with Twitter in September 2014. However, following Elon Musk’s acquisition of Twitter in 2022, Wiwynn has not received any payments since November 2022.
According to the complaint, Wiwynn collaborates directly with customers to design and deliver customized data center and computing solutions. Under the Master Purchase Agreement with Twitter, Wiwynn would submit a list of required hardware parts for approval. After receiving approval, the company would purchase the components, and Twitter would make regular payments for the final products.
Following Musk’s takeover, however, Twitter “abruptly stopped” making payments and ceased responding to Wiwynn’s attempts to reach out. Wiwynn managed to cancel planned purchases for $40 million worth of components before delivery and resell or repurpose already acquired components to recover an additional $19 million. The company is now seeking compensation from X and Musk for the remaining unsold components.
The custom hardware setups Wiwynn built for Twitter are not easily marketable, so the company is asking a jury to determine how much X should pay in compensation. Wiwynn is seeking to recover at least $61 million in damages plus interest.
Wiwynn’s lawsuit adds to the mounting legal troubles Musk has faced since acquiring Twitter. The businessman is accused of halting payments to suppliers and landlords following the controversial deal. According to a lawsuit filed by a Twitter investor, Musk allegedly stated he would pay rent for the company’s office “over his dead body.”
Earlier this month, X was ordered to pay around $600,000 to a former Twitter executive who failed to respond to an email from Musk. Additionally, former Twitter chairman Omid Kordestani has sued X for over $20 million, and former CEO Parag Agrawal is seeking more than $128 million in unpaid severance.
With these ongoing issues, X appears increasingly like a bottomless money pit, while Musk remains preoccupied with his efforts to sue advertising companies for their reluctance to do business with X again.
