Twitter is facing a major crisis as it refuses to pay its Google Cloud bills, which could jeopardize its trust and safety teams and expose its users to spam and hacking. The conflict stems from a contract that Twitter signed with Google before Elon Musk’s takeover of the platform last year, which was related to fighting spam and protecting accounts.
According to Platformer, Twitter has been trying to renegotiate its contract with Google since at least March, but has not reached an agreement. The contract is due to expire this month, and Twitter has not paid its bills for the past several months. This could result in Google cutting off access to its cloud services, which Twitter relies on for some of its core functions.
Twitter hosts some services on its server and houses others on the cloud platforms of Amazon and Google. The cloud services allow Twitter to scale up or down its computing resources depending on the demand, and also provide security features such as encryption and backup. Without them, Twitter could face serious disruptions and damages.
“Musk has been and remains contractually obligated to use his best efforts to close this deal. What he’s doing is the exact opposite; it’s sabotage,” said William Savitt, Twitter’s lead counsel, in a lawsuit filed against Musk last week.
The lawsuit accuses Musk of breaching his fiduciary duties when he abruptly terminated the merger agreement between Twitter and his company Tesla in July, without cause or justification. The deal, which was valued at $44 billion, was announced in November 2022 and was expected to close by the end of June 2023.
Musk’s lawyer, Andrew Rossman, denied the allegations and said that Twitter failed to satisfy a number of conditions for the deal, including obtaining regulatory approval and securing the support of its shareholders. He also said that Musk decided to end the deal after careful consideration of all the factors, including the impact on his other businesses and personal life.
The lawsuit is scheduled to go to a five-day trial in October, according to a Delaware judge who ruled on Tuesday. The judge cited the “cloud of uncertainty” over Twitter as a reason for expediting the proceedings.
Meanwhile, Twitter is also facing pressure from Amazon, which warned Twitter that it would withhold advertising payments because of the company’s outstanding bills to Amazon Web Services for cloud computing services, according to the Information.
Since Musk’s acquisition, Twitter has cut costs dramatically and laid off thousands of employees. Musk ordered the company to cut infrastructure costs, such as spending on cloud services, by $1 billion, a source told Reuters in November.
“This is a very unfortunate situation for Twitter and its users. The company relies heavily on cloud services to run its operations and ensure its security. If it cannot resolve its dispute with Google, it may face serious disruptions and damages,” said Daniel Ives, an analyst at Wedbush Securities.
Twitter is refusing to pay its Google Cloud bills – Platformer, Reuters, June 10, 2023
Elon Musk-Twitter dispute: Judge orders October trial for lawsuit over acqusition agreement, CNN Business, July 20, 2022
Twitter-Musk takeover dispute heading for an October trial, AP News, July 19, 2022
Twitter may only have bad options left in its battle with Elon Musk, CNN Business, July 18, 2022