Intelligence Update
Community backlash forces operators to rethink NDA use
In the early stages of hyperscale data center developments in the US and elsewhere, it is common practice for developers and local governments to enter into nondisclosure agreements (NDAs) to protect sensitive commercial information. Negotiations conducted under an NDA, or through the anonymity of a shell company, can help secure better deals on land and subsidies or allow developers to play one location off against another.
However, this practice has drawn increasing criticism from environmental and community groups that oppose data center development. These groups argue that NDAs can be used to bypass legitimate public scrutiny and undermine democratic processes (see Data center cancellations on the rise as public opposition grows). Critics contend that NDAs have gone beyond their intended role, preventing elected officials from discussing details of proposed data center projects that are public concerns, such as energy usage, water consumption and tax incentives.
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