Despite Elon Musk’s friend and backer Larry Ellison investing $1 billion in the takeover of Twitter, Musk has refused to pay numerous companies and vendors over the past several months, including Google and Amazon for their cloud services, PR firms, and landlords across the US, Europe, and Asia. Oracle, which Ellison cofounded and remains chairman and CTO of, is the latest Twitter vendor to go unpaid for services rendered, according to sources. Oracle representatives have started calling current and former Twitter employees to collect on past-due invoices that are well into the six-figure range. Oracle has provided Twitter with data storage services for several years, according to sources.
Musk sometimes uses a refusal to pay as a negotiation tactic, according to a report, with mixed results. Google just renegotiated the terms of its deal with Twitter. However, Twitter and Musk now face several lawsuits from landlords and other vendors who simply want to receive what they are owed. With so many unpaid creditors, Musk now runs the risk of Twitter being forced into an involuntary bankruptcy. If at least three unpaid Twitter creditors join together, they can take the company to bankruptcy court and demand that it be put into Chapter 7 or Chapter 11 bankruptcy proceedings. A judge then decides whether to proceed with a bankruptcy process.
Ellison may have advised Musk on his Twitter takeover and his dramatic dealings, given Ellison’s close personal and financial relationship with Musk. Ellison and Musk are longtime friends, and Ellison put $1 billion toward Musk’s $44 billion takeover of Twitter, making him one of the largest investors in Musk’s Twitter, officially part of X Holdings Co. Ellison has frequently been one of Musk’s most vocal supporters and was previously on the board of Tesla, Musk’s electric car company.
Since the takeover, Musk has reduced Twitter’s staff by 90% and eliminated perks, bonuses, and many benefits, also scaring off advertisers that were the source of nearly all of Twitter’s revenue. NBCU’s former ads chief Linda Yaccarino just started as Twitter’s new CEO and is attempting to rebuild the company’s ad business. Although Musk relinquished the CEO title, he remains in charge of all of Twitter’s tech, product, and engineering. However, despite cutting costs and ignoring vendors, Musk has spent many millions of dollars laying the groundwork for a new AI project, according to Insider, and is now trying to build up Twitter’s video capabilities.
