As artificial intelligence fuels an unprecedented boom in data center construction across the United States, a growing number of local governments have come under scrutiny for signing nondisclosure agreements (NDAs) that limit what officials can publicly say about proposed projects. Critics say the agreements reduce transparency around developments that can have major impacts on energy grids, water supplies and local communities, while supporters argue that confidentiality is often necessary during sensitive business negotiations. Pennsylvania has become the latest flash point in the national debate over the facilities.
A Center Square investigation found that four of nine data center projects included in Governor Josh Shapiro's former "Fast Track" permitting program involved municipalities whose officials signed NDAs with developers or related parties. A fifth municipality, Kline Township, stopped responding to records requests seeking information about potential confidentiality agreements. The agreements involved projects connected to companies such as Amazon, Quality Technology Services and Oracle America.
Shapiro, who has shifted his position on data centers, signed an executive order in August removing data centers from Pennsylvania's fast-track permitting program and barring the use of NDAs by agencies under the governor's jurisdiction in future data center projects. In Virginia, the nation's largest data center hub, researchers who examined local government records wrote that 25 of 31 localities with existing, approved or proposed data centers had signed NDAs with developers. The researchers said the findings suggest that confidentiality agreements have become commonplace in negotiations surrounding major data center projects.
Arizona has also emerged as a focal point. Senator Richard Blumenthal of Connecticut, a Democrat, cited reports that Amazon sought to restrict what officials in Pima County could publicly discuss regarding a proposed $3.6 billion data center project. The case has become one of the examples cited in a broader Senate inquiry into data center secrecy.
In Louisiana, according to local reporting by NPR, residents raised concerns after negotiations surrounding a large Applied Digital data center project in Rapides Parish were conducted under NDAs. Some residents told NPR they felt key details remained hidden from the public while decisions were being made. Questions have also surfaced in Tennessee over confidentiality agreements surrounding xAI's high-profile "Colossus" facility near Memphis.
According to Public Citizen, xAI required government officials to sign NDAs during the development of the project, limiting the disclosure of information about the facility before it became operational. Critics argue that the agreements prevented residents from fully understanding the scope of the development, including its potential environmental and infrastructure impacts, until late in the process. Public Citizen reported that residents learned about aspects of the project only weeks before operations began, fueling concerns about transparency and public oversight.
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