Twitter reportedly refusing to pay Google Cloud bills

Elon Musk’s Twitter Inc. is said to be playing hardball with Google Cloud, refusing to pay its bills in a high-stakes gambit that could result in its moderation services going offline.

The report comes from Platformer, which said today that Twitter recently refused to pay Google Cloud ahead of its June 30 cloud contract renewal data. Back in 2018, Twitter signed a $1 billion multiyear contract to host some of its services on Google Cloud, but is now said to be rushing to move those services back onto its own, on-premises data center infrastructure before the contract expires.

However, Platformer says the effort is running behind schedule, and could lead to some of its moderation tools, such as Smyte, which Twitter acquired in 2018, going offline.

Platformer’s report says that if Twitter fails to migrate Smyte and other systems onto its own servers before the end of June, its ability to combat spam and child sexual abuse material will be greatly impacted.

Smyte has already experienced problems, though. With Musk (pictured) making deep cuts to Twitter’s workforce since taking over the company last year, Smyte hasn’t always been up to the job.

For example, in December Musk reportedly complained to Twitter’s trust and safety team that the automated system had failed to spot a Twitter Blue user impersonating his identity to pump a crypto scam. The team told Musk that the Smyte system was experiencing stability problems and had been crashing daily.

Twitter has faced some big stability issues ever since Musk took over the company. In February, it saw many of its core features go offline on multiple occasions. Then in May, Florida Governor Ron DeSantis experienced problems as he launched his candidacy for the Republican presidential nomination on Twitter, which reportedly could handle the strain of so many people wanting to view his broadcast.

According to Engadget, Twitter’s decision to withhold payment from Google Cloud stems from its dissatisfaction with the performance of its infrastructure. Twitter is allegedly complaining of multiple disruptions and inconsistencies, and is withholding payment to try and force Google to fix those problems.

Constellation Research Inc. analyst Holger Mueller said if the reports are true, Twitter is risking potentially losing services that matter to its biggest customers, namely the advertisers that provide its main source of revenue. He said Musk is likely avoiding paying in order to be able to negotiate with Google, while using the deadline to rally his internal teams.

“Musk knows how to manage things in a relentless way, but at the end of the day he knows there’s no getting out of the need to pay what’s owed to cloud providers,” Mueller said. “He also knows he can’t lose the goodwill of his advertisers, nor burn out his employees. So the pressure will likely dissipate at some point with a payment and an extended deadline.”

Besides using Google Cloud, Twitter also hosts some of its services on Amazon Web Services Inc.’s public cloud. In March, The Information reported that AWS was threatening to withhold advertising payments from Twitter due to outstanding bill payments.

It’s not clear if Twitter was also dissatisfied with AWS or the refusal to pay was simply part of Musk’s ongoing cost-cutting measures. Since acquiring Twitter, Musk has attempted to reduce the company’s costs dramatically. In November, he reportedly ordered his infrastructure teams to reduce their cloud spending by $1 billion per year, and he has also laid off thousands of workers.

Twitter has a track record of refusing to pay when it’s not satisfied. In December, Bloomberg reported that Twitter was being sued Columbia Property Trust Inc., which owns the building that houses its headquarters, for nonpayment of rent.

Photo: NASA/Wikimedia Commons