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.

NDAs are typically signed at multiple levels, including with water utilities, energy providers and local governments. They may be in place for a year or more before any public project announcement, and secrecy can extend beyond the NDA period. Developers may further mask their identity by operating through companies specially created for a project, while local governments have been accused of limiting transparency by resisting freedom of information requests.

The practice is widespread. It has been commonly used by AWS, Google, Microsoft and Meta, as well as wholesale colocation partners such as Vantage Data Centers and QTS. In the state of Wisconsin alone, five recent projects involved NDAs with local governments, whose responses to freedom of information requests were often slow or incomplete (e.g., releasing emails but withholding attachments) or required legal action, according to nonprofit newsroom Wisconsin Watch.

This level of secrecy has contributed to a rising (and, in some cases, successful) tide of opposition to data centers. In early 2026, 230 advocacy groups urged the US Congress to impose a moratorium on data center construction pending tighter regulations. Uptime Intelligence noted that at least eight US projects were canceled or at risk during the first six weeks of 2026 due to public opposition.

Opposition to NDAs grows

In response, some US states are exploring legislation that could restrict or ban NDAs between data center developers and local governments. In some cases, these measures form part of broader legislation designed to ensure data centers' power demands do not increase consumer utility rates or are linked to proposed moratoria (such as in Georgia, Maryland, Oklahoma, New York and Wisconsin).

No state has yet enacted a full ban on NDAs for data centers and other large projects, but related provisions have advanced in three legislatures:

• Wisconsin's Senate did not pass Senate Bill 969, which would have prohibited local governments from signing NDAs with data center developers, despite approval by the utilities committee.
• Minnesota's House of Representatives is considering finance bill HF4077, which includes a ban on data center NDAs and has been approved by the finance committee.
• Florida passed Senate Bill 484, designed to ensure data centers pay for electrical utility infrastructure, although a provision banning data center NDAs was removed from the final version.

The industry is also starting to take note of the opposition to NDAs. In January, Microsoft announced a community engagement plan to address concerns about new data center campuses (see Microsoft's Community-First Plan needs more work). In a recent expansion of the plan, Microsoft became the first hyperscale data center operator to end the use of NDAs in negotiations with local governments.

Microsoft's latest community initiative puts the company ahead of potential legal changes in the US. The policy will apply worldwide and includes existing NDAs. The company has warned that many details of large projects are not available at the outset but are decided in stages during development — from land purchase through design to construction and operation. To address this, the company says it will endeavor to share information as it becomes available. Certain aspects of data center design and security, however, are effectively trade secrets and will remain private.

This approach is likely be followed by other developers, especially in an environment where blanket NDAs are no longer an option. While voluntarily ending NDA use cedes some control over project development, it directly addresses a major source of opposition to future data center construction. This is an important step if the industry is to be recognized for its commitment to transparency.

Other related reports published by Uptime Institute include:
Project approval will hinge on local benefit guarantees 
Data center cancellations on the rise as public opposition grows 
Microsoft's Community-First Plan needs more work