AI Data Centers Are Losing the Trust War — And Dropping NDAs Is Just the Beginning

Amazon just did something unusual for a Big Tech company: it admitted it was wrong. In a blog post last week, AWS CEO Matt Garman announced that Amazon will no longer use nondisclosure agreements when negotiating data center deals with local governments. “We no longer use nondisclosure agreements with the government agencies we work with on our projects,” he wrote. The announcement came buried in a longer post defending data centers against what Garman called “misinformation and outright lies” — but the NDA reversal is the real story.

Microsoft made a similar move earlier this year. Two of the largest cloud providers in the world have now voluntarily given up a tool they’ve used for decades to keep data center negotiations secret. That doesn’t happen unless something has fundamentally shifted in the political landscape.

The Secrecy Problem

Here’s how the NDA system worked. When a tech company wanted to build a data center in your town, it would negotiate with local officials behind closed doors. Those officials would sign nondisclosure agreements that prevented them from sharing basic facts: how much power the facility would use, how much water it would consume, what tax breaks were being offered, and sometimes even who the actual tenant was. Residents would learn about the project only after permits were secured and the deal was done.

In Salem, Oregon, the city manager signed an NDA with a data center developer called Verrus in March 2025. Residents didn’t find out until months later, when they packed a council meeting to air their grievances. One resident called the NDA “a definitive blow to our trust.” In Louisiana, Meta used NDAs with the governor, state officials, and local leaders to speed up approval of one of the largest AI data centers in the world — while shielding the project from public scrutiny.

The practice wasn’t universal, but it was common enough to become a pattern. In Indiana, researchers found NDAs in 7 of 46 AI data centers they surveyed. Some agreements even required local governments to find legal ways to block public records requests, forcing residents to go to court to get basic information about projects in their own communities.

The Political Backlash

The secrecy has fueled a backlash that the AI industry is struggling to contain. More than 100 data center moratoriums are being considered across the country. One tracker counts 387 delayed, canceled, or scrutinized permits in the first half of 2026 alone. New York imposed a one-year statewide pause on hyperscale data centers. In East Fishkill, New York — a town that once embraced its IBM semiconductor heritage — residents secured a three-year moratorium after a proposed 1-gigawatt campus sparked protests over water use and noise.

The polling is brutal. A POLITICO survey conducted in July found that only 16 percent of Americans believe data centers “benefit the area they are built in and the country as a whole.” Roughly 60 percent said the projects either come at the expense of the local area or provide no benefits at all. The share of Americans who believe data centers raise electricity bills jumped from 43 percent in January to nearly 60 percent in July. The share who believe they deplete water supplies grew from 34 percent to 55 percent in the same period.

This isn’t a partisan issue. Opposition spans the political spectrum, though it’s grown faster among Democrats. In Utah, elected officials who fast-tracked permits without proper notice to neighbors have lost their seats. A Utah State University poll found 68 percent of residents oppose data centers within three miles of their homes.

The Cost-Shifting Problem

The NDA issue is really a symptom of a larger problem: who pays for the AI buildout? A 27-page Senate report released October 9 by Senators Elizabeth Warren, Richard Blumenthal, and Chris Van Hollen found that seven of the largest data center operators — Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix — refuse to cover the full grid infrastructure costs their facilities trigger. The companies commit to paying for infrastructure that solely benefits them, but they dispute how much they should pay for shared grid upgrades that are built to accommodate their data centers but serve the broader public.

The result is that ratepayers absorb the difference. In the 13 mid-Atlantic states served by PJM Interconnection, data center demand will add an estimated $6.3 billion in charges for ratepayers in 2028 and 2029. One in three households nationwide is already struggling to pay utility bills. Data centers are estimated to account for around 20 percent of all domestic energy use by 2035, up from 5.9 percent today.

This is the same dynamic I covered when Satya Nadella called for an emergency brake on AI — the gap between what AI companies promise and what communities actually experience. When a company says a data center will bring jobs and tax revenue — the same pattern Tony Fadell identified in AI gadgets, but the local government can’t tell you how much water it will use or what it will do to your electric bill, trust evaporates. The NDA was the mechanism that made that trust gap possible.

The Legislative Response

Lawmakers have moved faster than the industry. On August 18, Pennsylvania Governor Josh Shapiro signed an executive order banning state agencies from entering into NDAs for data center development. Governors in Massachusetts and Delaware issued similar orders. States including Michigan, Kentucky, and Ohio are considering legislation to prohibit such agreements entirely.

At the federal level, a bipartisan trio — Representatives Greg Landsman (D-OH), Tom Barrett (R-MI), and Jamie Raskin (D-MD) — introduced the No Secrets for Data Centers Act on September 24. The bill would void NDAs signed by government officials on data center projects and bar companies from receiving subsidies tied to confidentiality. Raskin sent letters to Amazon, Google, Meta, and Oracle demanding information about their NDA practices. Amazon replied that it had already stopped the practice.

The bill is a direct response to the secrecy that defined the first wave of AI infrastructure development. Its sponsors argue that if companies want public subsidies and public land, they should be willing to negotiate in public.

What Amazon’s Move Actually Means

Amazon’s NDA reversal is real, but it’s worth understanding its limits. The policy applies only going forward — Amazon has no plans to revisit the NDAs it already signed. Those agreements remain in effect, which means communities that are currently bound by secrecy clauses will stay bound until the projects are public or the agreements expire.

The company also announced a $1 billion community investment program over five years, focused on education, workforce training, and energy efficiency in areas where it builds data centers. Garman argued that Amazon has already contributed more than $1 billion to such communities over the past three years. But the Senate report undercuts the idea that voluntary commitments are enough — it found that companies define “full costs” narrowly, covering only direct infrastructure while shifting system-wide burdens to ratepayers.

TechCrunch’s Equity podcast captured the prevailing uncertainty well. Host Sean O’Kane noted that the industry “just does a really poor job explaining itself.” Rebecca Bellan expressed skepticism that short-term moratoriums would derail long-term construction, since most data centers won’t come online for years anyway. But the fact that two of the largest cloud providers have voluntarily given up a standard negotiating tool suggests they see the writing on the wall.

The Trust Deficit

Anthropic CEO Dario Amodei recently described the situation as a crisis of trust. He’s right, but it’s not just about trust in AI — it’s trust in the entire infrastructure stack that supports it. When communities learn about data centers after the fact, when officials can’t answer basic questions about power and water, when the costs show up on electric bills without a clear explanation of why, the result is a political backlash that no amount of blog posts can contain.

The NDA retreat is a tactical adjustment, not a transformation. It removes one flashpoint. Officials can now speak more freely with constituents before deals close. Residents might learn earlier about proposed sites and scale. But the deeper issues — who pays for grid upgrades, how much water is consumed, whether permanent jobs materialize beyond construction — remain unaddressed.

The AI industry has spent years building infrastructure in secret — even as the economics remain unsettled and acting surprised when communities push back. Dropping the NDAs is a start. But as I’ve argued before, the real test isn’t whether companies are willing to negotiate in public — it’s whether they’re willing to absorb the full costs of what they build. Until that changes, the backlash will keep growing, and the moratoriums will keep coming.

The era of building AI infrastructure behind closed doors is over. What replaces it — genuine partnership or statutory mandate — will shape the next phase of the AI buildout. Communities are watching.