X sued for $61 million over unpaid bills

X (formally known as Twitter) is facing another lawsuit, this time over unpaid server parts by Taiwanese tech company Wiwynn.

Just after X was hit with a $600,000 fine over an unfair dismissal on August 13, the Elon Musk-owned social media site has more money troubles brewing.

Wiwynn, a Taiwanese tech company, is suing the social media site for $61 million after it allegedly failed “to compensate Wiwynn for custom components.”

The cloud-enabling service company filed the lawsuit on August 16, 2024, with the U.S. District Court for the Northern District of California, claiming that the social media giant breached a 2014 purchasing agreement.

The complaint states (provided by The Register) that on September 24, 2014, X (then known as Twitter) entered into what’s known as a “Master Purchase Agreement”, after “recognizing the value” Wiwynn’s cloud IT services could provide the site.

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The complaint, as provided by The Register, states that on September 24, 2014, X (then known as Twitter) entered into a “Master Purchase Agreement” after “recognizing the value” Wiwynn’s cloud IT services could provide to the site.

A Master Purchase Agreement (MPA), according to the Contact Counsel website, is a legally binding contract between a buyer and a seller. This MPA between companies was in place for eight years “without issue.”

However, as of November 2022, the claim states that X “abruptly stopped making any payments to Wiwynn” including for delivered products.

The claim also states that X failed to respond to multiple communications from Wiwynn, which were inquiries about the past-due payments for “delivered finished products.”

At that time, Wiwynnn had sourced, and paid for around $120 million worth of custom and non-custom IT components for X.

However, the claim explains that X “stopped providing” any additional info on how the company was meant to deliver the products to X.

According to Business Insider, Wiwynn has been able to recover around $59 million worth of components. However, the company is suing Musk’s X over damages for leftover $61 million.

A research analyst for DIGITIMES states that, as of writing, Wiwynn is no longer in business with X, and that Dell and Supermicro currently provide the social media site with AI server procurement.