Amazon follows Microsoft in dropping NDAs for data center talks with local governments, TechCrunch reports

What happened

Amazon recently said it will no longer use nondisclosure agreements, or NDAs, while negotiating with local governments over data centers, TechCrunch reported. The company followed Microsoft, which made a similar announcement earlier this year.

According to TechCrunch, Amazon's NDA announcement appeared in the middle of a longer blog post in which the company argued that data centers are good for communities. The change was discussed on the latest episode of TechCrunch's Equity podcast by weekend editor Anthony Ha, Sean O'Kane and Rebecca Bellan.

Why secrecy in data center deals draws criticism

Projects negotiated out of public view

O'Kane said on the podcast that many data center projects are negotiated essentially in secret. In some cases, he said, the public knows a data center is planned but does not know who will use or occupy it. He described that secrecy as the root of many problems the tech industry faces over data centers.

He listed the concerns residents raise, including effects on property values, electricity bills and local water usage. He said there are many questions about whether those are real or inflated problems, but that much of the debate goes back to how the deals are negotiated.

An earlier example from ride-hailing

O'Kane compared the practice to Uber's approach in the mid-2010s. He recalled a story about a city outside Orlando where Uber sought tax subsidies to help pay for rides connecting people to public transit. He said that deal was negotiated in secret and that the secrecy appeared to make the company comfortable asking for more.

Moratoriums and their limits

Local pauses on new projects

Bellan said a significant number of data center moratoriums have been passed, including one recently in San Francisco. She said they last only about a year or two, while, in her words, "these data centers aren't coming online for the next two, three, four, five years."

She said buildouts are going to be heavily delayed for reasons ranging from zoning to funding. She added that continued pushback might have an effect, but questioned how much political opposition is changing the outcome.

New York's environmental review

Ha pointed to New York, where a moratorium applies to permits for large projects. TechCrunch noted it technically lasts until the state finalizes an environmental review process, which is expected to take a year. Ha said moratoriums framed as time to study the issue leave officials room to approve projects later.

Is dropping NDAs enough?

Ha said data center backers appear worried about community resistance. He said ending NDAs will not automatically win over opponents, but that it addresses a basic complaint that the public does not know what is being negotiated. "So it does seem like a good first step," he said.

O'Kane said he was glad Amazon made the change. "We'll see if it actually does have any positive effect, but people are pretty entrenched right now," he said on the podcast.

A communication problem

O'Kane argued the larger issue is communication, saying "the industry just does a really poor job explaining itself." He said companies are frustrated that most people cannot picture how AI would be useful to them. Ha said recent obstacles mean the industry now has to make its case rather than present an AI-driven future as inevitable. More coverage is in our AI and tech section.

What to watch next

• Whether Amazon's decision to drop NDAs has any effect on community opposition, which O'Kane said remains entrenched.
• New York's environmental review for large data center permits, which TechCrunch said is expected to take a year.
• Whether continued pushback affects data center buildouts, which Bellan said she is unsure the political opposition is doing.