Hey, one of these articles about “Elon’s Twitter isn’t paying its bills” finally said the quiet part out loud:
“…AWS is not willing to renegotiate the five-and-a-half year contract it signed with Twitter in 2020 … contract required Twitter to pay $510m over that period … signed when Twitter was expecting to [use AWS heavily], but that never occurred … meaning that Twitter is not fully making use of the contract. … Twitter [paid] $10m in AWS costs a few weeks ago … at least $70 million still outstanding…”
“Twitter uses Google Cloud to a greater degree … its own five-year contract worth $1bn … Twitter is up to date on payments”
So a $0.5bn contract for the cloud that apparently just serves Twitter Spaces, and a $1bn contract for the cloud that serves the rest of Twitter. “Not fully making use of that contract” indeed, I wonder what the actual utilization metrics say. We can guess: the article claims Twitter paid $10m while owing at least $80m, so this means Twitter is using at most 1/8th of the capacity. That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money. Non-payment will certainly bring them back to the negotiating table.
Reporting on Twitter’s other non-payments of rent, services, etc. has been more careful to not hint at the reason for non-payment. After all, when someone’s being evasive about paying the rent, we all know it’s because they don’t have the money.
>That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money.
There's another reason for them to avoid this-- to not create the precedence that people can get out of contracts if they decide they don't like them anymore. If they let someone do this, even a big player like Twitter, that could lead to a lot of trouble in the future with other players trying to re-negotiate
A half-billion-dollar contract is almost certainly going to have re-negotiation procedures specified within (Amazon would naturally be worried that Twitter could easily over-use the services, so they’d want provisions to change the contract in the direction of higher costs - which Twitter would obviously only agree to if the provisions were symmetric). Most likely these provisions exist but aren’t all that binding when it comes to forcing the parties to come to the table and Amazon is dragging their feet on entering the re-negotiation clauses so they can have more months or years of the free money contract.
Elon's bold strategy of "not paying any of his bills" doesn't seem like a great way to keep a service up and running, but then again neither does firing any engineer who doesn't agree to be on call 24/7/365 to address Elon's little temper tantrums.
The knots that people twist themselves into to claim that everything naughty ol' Mr Car does is always correct are kind of incredible, and, I think, basically unprecedented in the tech space. Steve Jobs' fans were pretty bad, but this is more like L Ron Hubbard's fans.
This has nothing to do with Elon, but rather that’s just how business works.
The number of people that criticize without understanding how business works is almost comical.
On the otherhand, California and the Valley are pretty comical to the rest of the country..
Is it unrelated? He's assuming Musk's takeover caused the downtime, but you're assuming it didn't. I can think of several reasons it might've (removing a large amount of staff and overworking the remainder being obvious ones). What's the alternative?
Or…the code base is a house of cards built by a poorly managed company. Then when changes are made the legacy code falls apart. This is the more likely scenario.
Ultimately Twitter like the rest of the Valley was built on some great developers..and a whole lot of bad ones.
Seems straightforward to me. Elon steps in, fires a bunch of technology talent, and voila, Twitter is on track to have 3x more downtime in the following year.
I’ve been curious how long you can get away with not paying your AWS bill before they start shutting your stuff off. Obviously it matters how big a customer you are, and I imagine AWS will put up with quite a bit in the hopes of having that contract honored before burning that bridge entirely.
What kinds of knobs does AWS have, I wonder? Not allowing new resources to get allocated? Eventually start draining existing resources? I imagine for stateful stuff like DB tables and EBS volumes they might keep them around but inaccessible to Twitter until they pay their bill.
I of course am a responsible individual with a flawless credit score so I have no experience with such things myself
Amazon wants Twitter to spend according to contract; refusing service would run counter that. When there is a contract, there are hefty legal switches one can throw. No need to fiddle with resource knobs.
That's a very naive view. At the customer size of Twitter, it's more like the old adage. If you owe the bank $1MM it's your problem, but if you own the bank $100MM it's their problem.
Yes and when refusing service Amazon would not be fulfilling their part of the contract. Negotiations would be harder for them in that case.
Cutting service is the very last cudgel to come out for large contracts. And only when counterparty's insolvency is looming. Which may or may not be the case for Twitter.
If Amazon concluded Twitter's insolvency was near it would certainly negotiate on the contract. Before cutting service. Which is why it's interesting to watch Amazon's reaction here.
It’s funny to think about AWS doing hardball arm twisting stuff like “we moved all your S3 objects into Glacier Deep Storage, we’ll be happy to help you retrieve them once we straighten out this little problem with your bill”
_Presumably_ amazon believes that twitter has sufficient assets that a court order can leave them whole. They have a contract with twitter, so twitter can't simply not pay indefinitely it's just a matter of when amazon decides that twitter's debt to them exceeds their assets, and their revenue won't make up for it.
This is a good point. It makes it seem a lot more binary, actually. Either I think I can get my money with enough legal work, so I keep serving them, or I don’t think I’ll be made whole so they’re fired as a customer and their assets get liquidated (modulo anything that is paid up like reserved assets that are paid in full).
Again my enviable FICO score and decades of responsible borrowing mean I’m speculating quite a bit here
I can't speak to AWS but in my experience with an expired credit card and a few dollars owed on an otherwise unused account Azure will permanently destroy your data and resources after about 5 months.
That's generous.
I had an OVH VPS that got shut down and wiped all within about a month of missing a payment.
And the shutdown notice never went to my regular email, just to "ovh email" notifications dashboard which I almost never visit.
For a company as large and popular as Twitter, turning off their servers will be a CEO-level decision at AWS. And the conclusion will likely be that there's very little benefit in doing so. You're going to get your money from them one way or another.
Bet on an ecosystem. Waived due diligence. Didn't read the contract. Trampled the biosphere. Now trying to negotiate the bill. Ragequit incoming. Sells for pennies.
I have sympathy with consumers who don't read the terms. I laugh when rich people misspend billions.
I thought they have their own data centers. I doubt AWS would close their account or pause their control plane. It is more likely to turn into a new agreement of court forcing them to pay damage for long term contract and then quit the commitment.
The thing I really hate about the Elon Twitter purchase saga is that now you have an army of Elonauts who believe that breaking contracts is just normal contract negotiations.
I’m dreading facing one of these people off in court one of these days. Eventually they will have to pay up, and more, but it’s just an awful waste of time and energy for everybody.
> now you have an army of Elonauts who believe that breaking contracts is just normal contract negotiations
To be fair, I'd say Trump perfected that business plan but Trumponauts are much less terminally online than the Elonauts (although I suspect the overlap is high.)
I was being entirely selfish. I’m unlikely to ever do business with a Trumpnaut being in the tech industry. I’ve already worked with some Elon fans before, and it’s likely I will work with more going forward.
The problem with a lot of these people is that they follow the worst, most superficial aspects of their idols. It’s like when all the Jobs followers decided being a good CEO meant wearing jeans and a black turtleneck and and being assholes to everyone around you.
I’m 100% sure the majority of the Elon followers won’t bother with his work ethic, which is admirable, and instead focus on his douchebaggery and petty criminality instead.
When was the last time you took ownership of a multi-million $$ contract? It actually happens quite often. This is business, not a Netflix subscription.
That’s business. Running a few EC2’s is a lot different than a multimillion dollar contract. Both sides have a little power to swing around.
This is done on a daily basis in all industries worldwide.
“…AWS is not willing to renegotiate the five-and-a-half year contract it signed with Twitter in 2020 … contract required Twitter to pay $510m over that period … signed when Twitter was expecting to [use AWS heavily], but that never occurred … meaning that Twitter is not fully making use of the contract. … Twitter [paid] $10m in AWS costs a few weeks ago … at least $70 million still outstanding…”
“Twitter uses Google Cloud to a greater degree … its own five-year contract worth $1bn … Twitter is up to date on payments”
So a $0.5bn contract for the cloud that apparently just serves Twitter Spaces, and a $1bn contract for the cloud that serves the rest of Twitter. “Not fully making use of that contract” indeed, I wonder what the actual utilization metrics say. We can guess: the article claims Twitter paid $10m while owing at least $80m, so this means Twitter is using at most 1/8th of the capacity. That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money. Non-payment will certainly bring them back to the negotiating table.
Reporting on Twitter’s other non-payments of rent, services, etc. has been more careful to not hint at the reason for non-payment. After all, when someone’s being evasive about paying the rent, we all know it’s because they don’t have the money.