News Server dealer keeps hitting at Elon Musk for $61 million bill — Wiwynn sues X for unpaid IT infrastructure products

[Admin]

Taiwanese server dealer Wiwynn alleges that X failed to pay for custom IT infrastructure hardware worth about $61 million.

Server dealer keeps hitting at Elon Musk for $61 million bill — Wiwynn sues X for unpaid IT infrastructure products : Read more

 

[JTWrenn]

The rich have no rules because they can afford the litigation. Musk and his ilk all play dirty, and should be denounced for it. Reasonable business morality is a good thing.

 

[ingtar33]

this article is deceptive to the extreme seriously misrepresenting the issue at hand

1) this purchase was made in 2014 without a contract signed. years before Musk took over Twitter
2) Wiwynn claims this project took almost 10 years to build what was bought in 2014, no product was delivered, simply built, twitter paid them almost 30 million dollars in continuing expenses for products not delivered on a contract that was never signed
3) When payments stopped when Musk took over twitter, Wiwynn continued to purchase parts for this IT infrastructure product they had yet to deliver accruing a claimed "additional 32mil in expense
4) when they asked for Payment from X, X replied they had no contract in place and no tech delivered so they would not continue to pay Wiwynn for a product they aren't using and don't need.

and this is what started the lawsuit. this is a lawsuit over a contract which was never signed for a product which was never delivered. The only reason Wiwynn has a leg to stand on is Twitter apparently paid them millions, and that I know is considered defacto consent to the contract by most courts. the problem is it appears twitter/x after musk took over never paid them, so it's debatable if that consent will matter now they're under new leadership.

 

[jlake3]

this article is deceptive to the extreme seriously misrepresenting the issue at hand

1) this purchase was made in 2014 without a contract signed. years before Musk took over Twitter

From the original complaint:
8. On September 24, 2014, recognizing the value that Wiwynn’s cloud IT infrastructure
products would bring, X Corp. (then known as Twitter, Inc.) contracted with Wiwynn and entered into a Master Purchase Agreement. A true and correct copy of the Master Purchase Agreement is attached hereto as Exhibit A.

Emphasis mine. Sure sounds like Twitter entered into a contract, although Exhibit A was not attached so I don't know the specifics. The amended complaint references Section 4.3.3, but quotes from it are redacted.

2) Wiwynn claims this project took almost 10 years to build what was bought in 2014, no product was delivered, simply built, twitter paid them almost 30 million dollars in continuing expenses for products not delivered on a contract that was never signed
3) When payments stopped when Musk took over twitter, Wiwynn continued to purchase parts for this IT infrastructure product they had yet to deliver accruing a claimed "additional 32mil in expense

From the original complaint:
15. Beginning in November 2022, X Corp. abruptly stopped making any payments to
Wiwynn—including for delivered finished products—and failed to respond to multiple
communications from Wiwynn inquiring about and demanding the past-due payments for delivered
finished products.

Emphasis again mine. Sure sounds like products were delivered at some point.

4) when they asked for Payment from X, X replied they had no contract in place and no tech delivered so they would not continue to pay Wiwynn for a product they aren't using and don't need.

From the original complaint:
9. Pursuant to the terms of the Master Purchase Agreement, effective as of September 24, 2014, between Twitter, Inc., for itself and the benefit of its subsidiaries and affiliates, and Wiwynn Corporation (“Master Purchase Agreement”), Twitter, Inc.—now X Corp.—provided to Wiwynn forecast orders for the products it intended to purchase. In accordance with the Master Purchase Agreement, after receiving these forecasts from X Corp., Wiwynn prepared lists of custom components which it would need to purchase in order to fulfill X Corp.’s forecast requirements. The Master Purchase Agreement required Wiwynn to submit these lists to X Corp. for approval before it could purchase the custom components.
10. In addition to approving the purchase of the custom components, X Corp. would occasionally direct Wiwynn to purchase additional, non-custom components to be used in the manufacture of products included in X Corp.’s forecasts. When directing Wiwynn to purchase these non-custom components, X Corp. explicitly approved such purposes in writing and assumed liability for the goods.
11. During the course of dealing of the parties for nearly eight years, X Corp. understood that by approving the purchase of the needed components, X Corp. was assuming liability for these components in the event that the components were not used in the manufacture of products forecasted by X Corp.
12. In its email correspondences with X Corp., Wiwynn informed X Corp. that it would not begin component procurement needed to fulfill X Corp.’s orders under the Master Purchase Agreement until X Corp. approved its list of custom components.
13. In addition, Wiwynn explicitly informed X Corp. that Wiwynn would not procure noncustom components without an express written acknowledgement from X Corp. that X Corp. would assume liability for those components. Again and again, X Corp. approved these requests in writing.
14. The Parties followed this general course of conduct for approximately eight years without issue. Prior to November 2022, X Corp. placed orders and made full payments for all of the products made from the components which Wiwynn purchased only after X Corp. confirmed to Wiwynn that it would assume liability for those components.
15. Beginning in November 2022, X Corp. abruptly stopped making any payments to Wiwynn—including for delivered finished products—and failed to respond to multiple communications from Wiwynn inquiring about and demanding the past-due payments for delivered finished products.
16. At this time, Wiwynn had procured and paid for, at the direction and approval of X Corp., approximately $120 million of custom components and non-custom components (which X Corp. had expressly authorized Wiwynn to purchase in writing) to manufacture the products forecasted and/or ordered by X Corp. However, at this time, X Corp. also stopped providing any additional instructions for Wiwynn to manufacture or deliver any finished products to X Corp. To no avail, Wiwynn made many inquiries to X Corp. as to how X Corp. would resolve its liability for these unused components Wiwynn purchased to fulfill X Corp. orders.

From the amended complaint:
19. On multiple occasions, Wiwynn expressly informed X Corp. that, without explicit approval, procurement activities for custom components would not commence. X Corp. provided such approval only after conducting internal reviews to ensure that the forecasts were stable and no changes were necessary. True and correct copies of exemplary email correspondence between the parties in which X Corp., through its then Senior Supply Chain Manager Christopher Kan, approved and assumed liability for the procurement of such custom components are attached hereto as Exhibit C.

Emphasis still mine. Sounds like Twitter/X had approved of purchases and that Wiwynn had been delivering products.

and this is what started the lawsuit. this is a lawsuit over a contract which was never signed for a product which was never delivered. The only reason Wiwynn has a leg to stand on is Twitter apparently paid them millions, and that I know is considered dejure consent to the contract by most courts. the problem is it appears twitter/x after musk took over never paid them, so it's debatable if that consent will matter now they're under new leadership.

Unless your belief is that Wiwynn fabricated nearly the entire background of the complaint they filed in court, this doesn't look like "contract which was never signed for a product which was never delivered" where Wiwynn collected millions for nothing and ordered a mountain of parts with no approval. It sounds like they were a regular supplier of IT infrastructure and Twitter/X approved them to procure parts for the next forecasted order, then cancelled the order and stiffed them for the parts they approved as well as product already delivered.

 

[Bikki]

From my observation, there is something wrong going on at Wywinn. Their stock lost 50% value in July alone.

 

[DavidLejdar]

Not just a "server dealer" actually. In 2023, Wiwynn was apparently involved in nearly 50% of the global server procurement market, including the AI server market.

From my observation, there is something wrong going on at Wywinn. Their stock lost 50% value in July alone.

After going some +290% before, they had a dip, after the quarterly financials had some minus year-on-year about cashflow, yeah. That brought the stock price to around, where it had been at the beginning of the year. The stock market is like that sometimes, see e.g. Intel's stock.

Wiwynn is still doing stuff though. E.g. their recently announced Nvidia GB200 NVL72 rack solution, with improved cooling solutions:
https://www.wiwynn.com/news/wiwynn-...d-cooling-solutions-at-ocp-global-summit-2024

Whether one considers Wiwynn to be overvalued, or undervalued, or whatever, a bit different topic though. They still have more revenue than Twitter did, when it was still public.

 

[Joseph_138]

There has to be more that we're not seeing, than just a vendor getting stiffed. They probably did crappy work, and crappy work shouldn't get paid.

 

[rm12]

There has to be more that we're not seeing, than just a vendor getting stiffed. They probably did crappy work, and crappy work shouldn't get paid.

Well, X should sue for crappy work, not unilaterally decide not to fulfil their part of the agreement that seems in one way or another to be in place. And even without written contract, if they were paying bills, they still acknowledged some kind of contract was in place.

 

[TravellingLight]

The Jowi author person writes "Musk didn't pay his bills." This statement is false under US law and people familiar with the United States would know that. It is a matter for the court to determine whether Musk "paid his bills". Until the matter is adjudicated, the reporter may only write that there is a dispute.
The author also naively fails to recognize that Musk has very sophisticated corporate counsel and that a man changing/saving the world is involved with contract disputes originating from acquisitions.
Meanwhile, https://www.msn.com/en-in/lifestyle...xai-supercomputer-superhuman-feat/ar-AA1shfSx

 

[palladin9479]

Ehh... his article is just straight up BS. Musk and X are 100% separate legal entities. They are either sueing private citizen Mr Musk or they are sueing corporation X. Either Elon Musk entered into a private contract or X (Twitter) entered into a private contract.

Stop lying and be honest with which it is.

 

[waltc3]

Musk is not responsible for Twitter's unpaid bills that occurred prior to his purchasing the company. X had nothing to do with this matter...😉 Of course not. The suits are best lodged against Jack Dorsey and friends, who divvied up the billions of dollars Musk paid for a censorious Twitter that was afloat from government and other left-wing sources, paying for illegal censorship of Americans, from Presidents to Senators, physicians and everyday Americans who all have freedom of speech rights. This guy gets nothing from Musk's X, seems to me. It's a waste of time, and likely it's nothing but more political BS from the left. Since Musk exercised his right as an American to freedom of speech, he has been under attack by the Biden regime ever since.

Please refrain from saying false things like "Musk doesn't pay his bills"--that really diminishes this site into a partisan hack. Indeed, Musk is outstanding at paying his bills, as Dorsey and Twitter stockholders discovered for themselves. You sort of goofed up already on the tariffs article, as Biden kept Trump's tariffs on and even added to them! As well, during the Trump term, all computer products for the US consumer markets were exempt, at the time. Uninformed people tried to blame the shortages on the tariffs, but that had nothing to do with them, as Lisa Su and others in the know stated at the time.

 

[tamalero]

Wow, its like Muskers are back to defend him lmao.

Also to the mod defending Musk. He literally drives and moves the company at his whim. The CEO of twitter is just a figurehead while Musk indirectly does all the changes based on his decisions.
When he purchased Twitter and renamed it X. All liabilities came part of the package. You can't just pack up and refuse to pay things.

 

[MergleBergle]

I have to admit this whole cult of personality thing with Musk is pretty amusing. One would think the guy literally invented everything his companies make. And oxygen. And water. And fire. I don't hate the dude, I just don't get how people get sucked into defending someone they don't even know. Steve Jobs, same kind of dude. Never bought the sandwich, won't be drinking the kool-aid. They're just people.

 

[Co BIY]

Wow, its like Muskers are back to defend him lmao.

Also to the mod defending Musk. He literally drives and moves the company at his whim. The CEO of twitter is just a figurehead while Musk indirectly does all the changes based on his decisions.
When he purchased Twitter and renamed it X. All liabilities came part of the package. You can't just pack up and refuse to pay things.

Saying Musk "doesn't pay his bills" because of a billing dispute between X and a supplier about apparently ambiguous contracts for vague products promised, planned and at least partially delivered and partially paid for seems like careless journalism. Possibly too close to libel for most editors.

I'm sure the court will have a fun time unravelling this knot.

Regardless of whether the bills are owed and should be paid it seems like these were somewhat unusual contracts with a lot of flexibility and contingencies. 10 years development for something not delivered ? Compare that to the recent article where X deployed a huge facility in 19 days!

 

[TJ Hooker]

10 years development for something not delivered ?

Why do you think that Wiwynn hasn't made any deliveries?

 

[Co BIY]

Why do you think that Wiwynn hasn't made any deliveries?

Not implying they never delivered anything. It seems they are specifically suing for payment related to things canceled and not delivered.

In the article it says many things weren't delivered or completed. Wiwynn still wanted paid because they made purchases in anticipation and to produce these items.

My point was it didn't sound like standard simple procurement contracts.

 

[Co BIY]

There has to be more that we're not seeing, than just a vendor getting stiffed. They probably did crappy work, and crappy work shouldn't get paid.

I don't think there is any indication of crappy work but it seems likely there was pretty loose contract relationship that grew to millions of dollars of liabilities on both sides. Probably fueled by a start-up culture at Twitter rolling in money. When the cutting began at X my guess is the managers of these contracts were released along with the contract cancelation.

The Judges will probably have to work hard on this. I bet X pays some but not all because both sides are putting forward their maximal position at this point.

 

[jlake3]

Not implying they never delivered anything. It seems they are specifically suing for payment related to things canceled and not delivered.

In the article it says many things weren't delivered or completed. Wiwynn still wanted paid because they made purchases in anticipation and to produce these items.

My point was it didn't sound like standard simple procurement contracts.

I used to work for a supplier to automotive companies and now work for a company that produces custom industrial equipment, and when you're dealing with stuff that is custom to one particular customer and cannot be repurposed or resold, the contracts are always written in a way where the customer cannot simply cancel and walk away for free at any time prior to delivery just because they choose to.

If Twitter is buying custom IT infrastructure on a regular basis and authorized Wiwynn to buy long-lead-time, custom items based on a forecast then suddenly cancelled all business, they'd likely be obligated to either take delivery of what's in the pipeline or pay a cancellation penalty based on how complete the cancelled product is in order to close out the contract.

 

[TJ Hooker]

Not implying they never delivered anything. It seems they are specifically suing for payment related to things canceled and not delivered.

In the article it says many things weren't delivered or completed. Wiwynn still wanted paid because they made purchases in anticipation and to produce these items.

My point was it didn't sound like standard simple procurement contracts.

It sounds like they had more or less a standing agreement to make specialized systems that involved long lead times. And that multiple such systems had been purchased and delivered over the course of that agreement, without issue, until recently.

I don't see anything suggesting they've been working on the same, specific order(s)/system(s) for 10 years without actually delivering anything on that them (which hopefully is a more precise restatement of what you first implied).

 

[tamalero]

Regardless of whether the bills are owed and should be paid it seems like these were somewhat unusual contracts with a lot of flexibility and contingencies. 10 years development for something not delivered ? Compare that to the recent article where X deployed a huge facility in 19 days!

Why do people keep repeating this "not delivered" myth?

Also Many of these apologists forgot that Musk also refused to pay twitter staff (yes, by Musks's direct orders) in a few cases.
Including also hosting and other services.
So again.. Musk has history...

 

[Co BIY]

It sounds like they had more or less a standing agreement to make specialized systems that involved long lead times. And that multiple such systems had been purchased and delivered over the course of that agreement, without issue, until recently.

I don't see anything suggesting they've been working on the same, specific order(s)/system(s) for 10 years without actually delivering anything on that them (which hopefully is a more precise restatement of what you first implied).

I was sure I read an article that implied that part of the project was a long term development project and that was part of what was canceled by X despite being essentially finished. I could not find that information searching today.

 

[Co BIY]

Why do people keep repeating this "not delivered" myth?

Also Many of these apologists forgot that Musk also refused to pay twitter staff (yes, by Musks's direct orders) in a few cases.
Including also hosting and other services.
So again.. Musk has history...

"Wiwynn also said that it had stockpiled $120 million worth of parts for existing orders that were not delivered "

Wiwynn adds two new counts to $61m lawsuit against Elon Musk’s X

Now accuses social network of intentional misrepresentation and negligent misrepresentation

www.datacenterdynamics.com

The fact that they were not delivered does not imply that Wiwynn improperly failed to deliver them. In this case it sounds like X refused to accept delivery by canceling the orders. The point of contention is whether they had an ongoing obligation to make those purchases.

 

[tamalero]

"Wiwynn also said that it had stockpiled $120 million worth of parts for existing orders that were not delivered "

Wiwynn adds two new counts to $61m lawsuit against Elon Musk’s X

Now accuses social network of intentional misrepresentation and negligent misrepresentation

www.datacenterdynamics.com

The fact that they were not delivered does not imply that Wiwynn improperly failed to deliver them. In this case it sounds like X refused to accept delivery by canceling the orders. The point of contention is whether they had an ongoing obligation to make those purchases.

Exactly. Did Twitter specifically signed a contract where they are bound to buy these orders?