Musk's X sued for $61 million over unpaid IT bills
Elon Musk's social media company, X Corp, is facing a $61 million lawsuit filed by Taiwanese IT infrastructure provider Wiwynn. The legal action stems from an alleged breach of contract related to unpaid bills for components worth $120 million that Wiwynn claims to have procured for X Corp. The lawsuit was filed in the California Northern District Court.
Wiwynn's business model and relationship with X Corp
Wiwynn, a cloud infrastructure provider for hyperscale datacenters, had a "Master Purchase Agreement" with X Corp (formerly Twitter) dating back to 2014. The Taiwanese firm's business model involves working directly with clients to design and deliver solutions tailored to their specific needs. This was the nature of its relationship with X. Under the agreement, X Corp would provide Wiwynn with forecasts of its infrastructure requirements, and in turn, Wiwynn would submit lists of components needed for approval before purchasing them.
Wiwynn alleges X Corp stopped honoring agreement post-acquisition
Wiwynn alleges that X Corp ceased honoring the agreement following its acquisition by Musk in 2022. The Taiwanese company claims that it had procured approximately $120 million worth of custom and non-custom components, which X Corp had authorized in writing. However, from November 2022 onward, X Corp allegedly stopped making payments or responding to communications.
Wiwynn seeks to recover $61 million through lawsuit
Wiwynn managed to cancel approximately $40 million worth of components that were yet to be delivered and recovered an additional $19 million by reselling or repurposing some unused components. This left a balance of roughly $61 million, which is now the subject of the lawsuit. The company has requested a jury trial and seeks damages no less than the claimed amount plus interest if the court rules in its favor.
