Server-maker Wiwynn expands $61M lawsuit against X

Finds two more reasons Musk should have known he was on the hook for datacenter kit

Taiwanese contract manufacturer Wiwynn has added two more counts to its complaint against Elon Musk's social network X, alleging hasn't paid for hardware it had contracted to buy.

Wiwynn filed a complaint [PDF] against X in August, stating that in 2014 it contracted with Twitter to provide "unique, custom-designed IT infrastructure products including rack solutions."

The products Wiwynn built, and which were used in Twitter's datacenters, were a bit funky.

"The components used to build the products are largely unique to the products, resulting in long lead times for ordering such component parts from suppliers," the complaint states. Wiwynn therefore required pre-Musk-acquisition Twitter to give "written approval for Wiwynn to purchase the necessary components to manufacture the custom products … and expressly assumed liability for the procurement costs."

That arrangement worked for years. Until Elon Musk took over in late 2022.

At that time, Wiwynn alleges, "X Corp. (under its new leadership) began to default on its payment obligations for products ordered … and failed to respond to Wiwynn's inquiries regarding overdue payments."

Wiwynn claimed it had delivered over $32 million worth of finished products, and also procured and paid for components for which X committed to assume liability. The Taiwanese builder was able to sell some unused components, but claimed it is still out of pocket and believes X is liable "for at least $61 million." Wiwynn sought a jury trial to address the matter and listed three counts: Breach of Contract, Promissory Estoppel, and Breach of the Covenant of Good Faith and Fair Dealing.

X tried to have the case dismissed, arguing that it had not breached contracts and that Wiwynn acted in response to forecast needs rather than after receiving firm purchase orders.

Wiwynn this week filed an amended complaint [PDF] that added two fresh counts: Intentional Misrepresentation and Negligent Misrepresentation.

Both counts argue that X told Wiwynn it would assume liability for acquiring components. They assert that "X Corp. has refused, and to a large extent ignored, Wiwynn's repeated requests for compensation of the costs."

The case continues, in the US District Court for the Northern District of California. We've asked X to comment but had not received a response at the time of publication. ®