Troublesome Issue: Controversial internet personality Elon Musk is again facing legal troubles after buying Twitter Inc. and rebranding it as X. The social network allegedly didn’t pay for custom hardware as previously agreed upon, and now an Asian supplier is seeking a jury trial to recoup costs.
Infrastructure manufacturer Wiwynn has filed a lawsuit against Twitter for unpaid hardware costs of $120 million. The Taiwanese company has provided custom hardware solutions for the social network for eight years under a “Master Purchasing Agreement” signed with Twitter in September 2014. However, after Elon Musk acquired Twitter in 2022, Wiwynn has not received any payments since November 2022.
According to the complaint, Wiwynn works directly with customers to design and deliver customized data center and computing solutions. Under a master purchasing agreement with Twitter, Wiwynn submits a list of required hardware parts for approval. After receiving approval, the company purchases the parts, and Twitter makes periodic payments for the final product.
However, after Musk’s acquisition, Twitter “suddenly” stopped making payments and stopped responding to Wiwin’s communications. Wiwin canceled plans to buy $40 million worth of parts before they were delivered, and recouped another $19 million by reselling or reusing parts it had already acquired. The company is now seeking compensation from X and Musk for the unsold parts.
Because the custom hardware setup Wiwynn built for Twitter can’t be easily sold, the company is asking a jury to decide how much X should pay in compensation. Wiwynn is seeking to recover at least $61 million in damages plus interest.
Wiwin’s lawsuit adds to the growing pile of legal troubles Musk has faced since buying Twitter. He’s accused of stopping payments to suppliers and landlords after the controversial deal. According to a lawsuit filed by Twitter investors, Musk said he would pay rent for Twitter’s offices “even in death.”
Earlier this month, X was ordered to pay nearly $600,000 to a former Twitter executive who didn’t respond to emails from Musk. Additionally, former Twitter Chairman Omid Kordestani is suing X for more than $20 million, and former CEO Parag Agrawal is seeking more than $128 million in unpaid severance pay. As these issues continue, X increasingly looks like a bottomless money pit, while Musk is preoccupied with suing advertising companies that are reluctant to do business with X.