120 million US dollars: Server manufacturer sues X over unpaid hardware
X allegedly broke off all communication with a server manufacturer and failed to pay for the hardware ordered.
Symbolic image. With 120 million US dollars, X could have filled several server racks.
(Image: IM Imagery/Shutterstock.com)
Another lawsuit is pending against X. The Taiwanese server manufacturer Wiwynn is accusing X of having ordered but not paid for hardware worth 120 million US dollars. Because Wiwynn mainly sells customized servers to data center operators – where Wiwynn is one of the larger suppliers –, the company is left with most of the costs.
According to its own statements, Wiwynn concluded a framework agreement with Twitter in 2014, known as the Master Purchase Agreement. This agreement stipulated that Twitter would send usage forecasts to Wiwynn and Wiwynn would then send back a list of required hardware. Twitter approved all the lists over the years, after which the supplier began ordering the components and building the servers. The contract stipulated that Twitter would pay for the order even if the hardware was not needed.
According to the statement of claim (file number 24-cv-05322), X is said to have confirmed the framework agreement several times after the takeover by Elon Musk. In the last round of orders worth a total of 120 million US dollars, X is said to have approved the purchase of non-custom hardware "again and again" in writing.
Not paid and ignored
In November 2022, X is said to have finally ceased all communication and ignored all attempts at contact by email and telephone since then. According to Wiwynn, the servers had not yet been shipped at the time, which is why the company was able to compensate for part of the order.
Wiwynn could therefore cancel component orders worth around 40 million US dollars in good time. This could relate to processors and GPU accelerators, for example. According to the statement of claim, the company also sold servers and components worth 19 million US dollars to other customers. However, this was not possible with all components due to custom production.
Wiwynn is apparently stuck with the remaining 61 million US dollars, plus the ongoing storage costs for the hardware. The manufacturer is demanding damages of at least 61 million US dollars in the lawsuit.
The lawsuit is being brought before the Northern District Court of California. A hearing date has not yet been set.
(mma)