It is not the first time that Elon Musk has come up short or refused to pay Twitter’s bills. There were previous reports of the CEO refusing to pay the company’s rent for its headquarters in San Francisco and other leased properties, and he has refused to pay cleaners and software companies as well.
Additionally, Musk refused to pay a bill for private charter flights and even discussed denying severance packages at one point. Therefore, it comes as no surprise that he is repeating the behavior yet again with Amazon Web Services (AWS).
Twitter’s “Late” Payments to AWS
According to The Information, Twitter has been refusing to pay AWS bills for months, which complicates things since the company relies on Amazon’s cloud services for key aspects of its platform. Moreover, there is at least $70 million in outstanding debt that the social media company has not paid.
- Twitter and AWS signed a five-and-a-half-year contract in 2020, which AWS is not willing to renegotiate.
- The contract states that the social media company is to pay $510 million over the contract period.
- It was signed when Twitter was looking to move its main timeline to AWS.
Because things have changed, Twitter is not making full use of what is in the contract, though it is not clear if that is why the company is refusing to pay. What is clear is that the choice not to pay has led to threats of retaliation from Amazon, which has said it would not pay for advertisements run on the social platform.
- Amazon’s ad bill on Twitter is expected to be around $1 million in the first quarter.
- There is also Amazon Studios to take into account, which might increase the hit to the company should Amazon not pay.
Regardless of the amount, more trouble with ads on Twitter would be rough for the company, which has been struggling with advertisers for some time.
Twitter Is Relying on Google Cloud
While Twitter has a contract with AWS, it uses Google Cloud more. There is even a five-year contract between them to the tune of $1 billion, though the social platform is looking to reduce costs there as well. While Google has not openly agreed to renegotiate to potentially lower costs, the social media company is up-to-date on its payments to Google Cloud.
Pull Back on Data Altogether
Musk has made many cost-cutting moves since taking over Twitter, including shutting down one of its primary data centers. While there are mixed feelings on that, especially when the site goes down, it is clear that the company is pulling back and cutting costs where data is concerned, even at the cost of performance.