Amazon has announced it will no longer use nondisclosure agreements (NDAs) in its arrangements with county officials regarding data center projects, according to wired.com. The company's CEO of Amazon Web Services (AWS), Matt Garman, detailed the new public commitments in a blog post published on Friday, October 2.

The announcement comes amid widespread community backlash against data centers across the United States, which has led to numerous moratoriums on new developments, wired.com reported. Garman acknowledged this backlash, stating that more than 100 data center moratoriums are currently under consideration nationwide.

"If these measures are enacted, the US could be writing its own losing ticket to [the AI] race, and the consequences would last generations," Garman wrote in his blog post, according to wired.com and techcrunch.com. "As a country, we can’t afford to find ourselves in that position."

Amazon's Commitments and Investment

In addition to ceasing the use of NDAs, Amazon plans to invest $1 billion over the next five years in communities that host its data centers, wired.com reported. This investment is designated for free community college programs, workforce training, and energy efficiency upgrades for schools, homes, and community buildings.

Techcrunch.com reported that Garman also stated that Amazon has contributed more than $1 billion to communities across the U.S. with a significant data center presence over the past three years.

Controversy Over NDAs

Nondisclosure agreements have become a significant point of contention in the expansion of data centers, wired.com noted. These agreements typically prevent local officials from sharing information with the public, including details about a project's energy and water consumption, or even the technology companies involved.

Wired.com highlighted instances where NDAs have obscured information. For example, secret agreements were crucial in developing plans for Hyperion, a large data center in Louisiana. In Tucson, Arizona, Amazon was revealed to be the tenant of a controversial data center only after a public records request, as an NDA had previously barred county officials from disclosing the identity of the end tenant. Amazon has since exited that project, according to wired.com. In South Bend, Indiana, where Amazon has invested over $13 billion in a data center campus, some elected officials claimed local government employees could not answer questions due to NDAs with the company.

The opaque nature of data center financing and construction often means that end tenants like Amazon do not directly interact with government officials. Wired.com reported that a top official in Wharton County, Texas, signed an NDA with contractor VisionFirst Advisors, not Amazon directly, preventing him from sharing details about an Amazon project. Wired.com's queries about whether Amazon's promises regarding NDAs extend to its contractors were not answered.

Legislative Efforts Against NDAs

A rush of recent local legislation has attempted to address the issue of secretive paperwork. Governors in Pennsylvania, Massachusetts, and Delaware have cracked down on data center NDAs through executive orders, wired.com reported. Several states, including New York, New Jersey, Indiana, and Ohio, have considered legislation to ban the practice.

At the federal level, a bipartisan group of lawmakers introduced the "No Secrets for Data Centers Act" in the House. Earlier this week, Democratic Representative Jamie Raskin, a sponsor of the bill, sent letters to Amazon, Google, Meta, and Oracle, requesting information on their use of data center NDAs, wired.com reported. Amazon informed The Wall Street Journal that it was no longer using NDAs, while Google, Meta, and Oracle did not respond to the Journal’s request for comment.

Addressing "Myths" About Data Centers

Garman's blog post also aimed to counter what he termed "misinformation and outright lies" concerning data centers' water use, energy consumption, reliance on diesel generators, and community impacts, according to wired.com and techcrunch.com. He suggested that some countries might be intentionally seeding misinformation in the U.S. to hinder the AI buildout, a narrative that wired.com reported is consistent with messages from the White House and tech leaders, though experts consider it "overblown" with little evidence of Chinese misinformation driving the backlash.

According to techcrunch.com, Garman specifically addressed four perceived "myths":

  • Water Consumption: Garman cited an Amazon report stating that "direct data center water consumption" accounts for only 0.5% of all industrial water usage in the United States, which he said is "orders of magnitude less than golf courses, almond farming, and many other industries." Techcrunch.com noted that these claims, like those from Nvidia about its new cooling system eliminating "pretty much all water usage" inside data centers, appear to overlook the broader water usage associated with electricity generation and chip manufacturing. Scientists have called for independent studies of data centers' water and energy usage, as there are no federal or state requirements for tech companies to report this data.
  • Electricity Costs: Garman argued that electricity rates have only increased in some states with many data centers, while decreasing or growing more slowly in others. He attributed rate increases primarily to an aging grid that has not been adequately invested in or expanded to meet demand. However, techcrunch.com reported that an independent watchdog recently attributed a 76% year-over-year price increase on America’s largest electrical grid primarily to data centers.
  • Pollution: Garman contended that critics focus on the maximum pollution allowed under data center permits. For instance, a planned Amazon data center in Texas is permitted to release 33 million tons of carbon dioxide annually, exceeding any other power plant in the U.S. Garman stated that data center generators are "idle 99.9% of the time," running roughly 10 hours per year, mostly for maintenance testing. Techcrunch.com mentioned that the NAACP is currently suing Elon Musk’s SpaceX/xAI over pollution concerns.
  • Community Benefits: Garman reiterated the end of NDAs with government agencies and the company's investment in communities.

Ongoing Skepticism

Despite Amazon's announcements, skepticism persists. Ars Technica reported that while Amazon was praised for ending NDAs, it was also criticized for downplaying data center pollution. Techcrunch.com cited Anthropic CEO Dario Amodei, who argued that the AI backlash is "fundamentally a crisis of trust," leading people to assume governments and tech companies are "cooking up some new way to screw them over." Similarly, writer Jasmine Sun noted that data center opponents often respond to tech companies' arguments with, "I don’t believe them."