10
Loading video...
By Amanda Greenwood and Hollie Silverman
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
A bipartisan group of lawmakers has introduced legislation to ban the use of nondisclosure agreements (NDAs) that prevent government officials from discussing proposed data center projects with the public. The proposal comes amid growing scrutiny of the rapid expansion of AI-driven infrastructure across the U.S.
The proposed "No Secrets for Data Centers Act"—introduced by Democratic Representatives Greg Landsman of Ohio and Jamie Raskin of Maryland and Republican Representative Tom Barrett of Michigan—seeks to make sure that data center plans are negotiated publicly rather than behind closed doors.
"Big Tech needs to be transparent about these deals, not force local officials to sign NDAs and keep secrets from their communities," Landsman said in a statement announcing the bill. "That means no more NDAs. Transparency can't just be a promise—it needs to be law."
Read More on News
Barrett said that residents should be informed about potential effects on "their land, their water, and their electric bills" before decisions are made. Raskin similarly said communities have a right to know how projects could affect utilities, the environment, and local economies.
What the Bill Would Do
The proposal comes as communities across the country grapple with large-scale data center proposals that can consume vast amounts of electricity and water while often receiving tax incentives or other public support. In several states, local officials have signed NDAs with developers, limiting what they can disclose to residents about projects under consideration.
...
According to the lawmakers' press release, the proposal would void NDAs signed by government officials that offer details about data center projects. It would also prevent tech companies from receiving government subsidies if those incentives are tied to keeping project details confidential, except where legitimate trade secrets are involved.
States Where Data Center NDAs Have Drawn Scrutiny
The federal proposal follows increasing attention on the use of NDAs in data center negotiations.
Multiple states have already entered confidentiality agreements tied to prospective data center developments. Those states include Arizona, Indiana, Louisiana, Pennsylvania, Tennessee, Virginia, and Wisconsin, among others, as communities weighed projects connected to major technology companies and AI infrastructure growth.
...
For example, in Arizona, Tucson’s Project Blue, a proposed data-center development whose planning was under NDAs for about two years, led to a backlash that prompted Pima County and Tucson officials to reconsider how such agreements are used.
In Page, Arizona, records revealed that city officials had signed NDAs with the developer months before a proposed 1-gigawatt data center was publicly disclosed, helping fuel community backlash over the project.
Virginia has faced similar concerns. A 2025 review found NDAs in 25 of 31 localities with existing or proposed data centers, with critics arguing that broad confidentiality provisions can limit public understanding of projects’ potential impacts.
Supporters of NDAs have argued that confidentiality is needed during site-selection processes, as they can help companies protect commercially sensitive information as they evaluate locations and negotiate the purchase of land.
Critics, however, say that the agreements prevent meaningful public debate about projects that can significantly affect local resources, electricity demand, tax revenue, environmental conditions, and long-term development plans.
In some cases, local officials have said that NDAs restricted them from discussing details with constituents until late in the approval process.
Growing Transparency Debate
The lawmakers behind the No Secrets for Data Centers Act pointed to reports showing that NDAs have at times prevented local officials from informing residents about the potential impacts of proposed facilities.
In announcing the legislation, the members of Congress argued that communities should have access to information before decisions are finalized.
"Local residents must have the final say about data centers in their communities, and that means they need to know all the facts so they can make an informed decision," Barrett said. He added that NDAs can leave residents in the dark about impacts until "it's too late."
The bill has also been endorsed by Brad Carson, president of Americans for Responsible Innovation (ARI), who said NDAs can obscure the terms of siting agreements and tax-abatement deals from the public.
"When a data center comes to town, residents deserve to know who's behind it and what the impacts will be before the bulldozers roll into town," Jessica Maksimov, Policy Analyst for ARI, told Newsweek in an email on Monday. "There's a recent history of tech companies using NDAs to prohibit local officials from disclosing the costs, tax breaks, and energy impacts associated with a data center.
"That's part of the reason behind the backlash to data centers: residents want to have a voice in whether to build a data center in their area. They deserve to have all the facts," she added.
"When the facts about data center siting are kept secret, what we often see is that construction starts before local residents can weigh in," Maksimov explained, adding, "NDAs can also hide the facts about a data center’s impacts, including on the energy grid, on tax revenues, noise levels, and more. Ultimately, those kinds of secret negotiations destroy trust in the project. For residents to have a meaningful voice in the process, they need the facts."
Maksimov said that Under the No Secrets for Data Centers Act, NDAs would be unenforceable only when they involve public officials acting in their official capacity or projects receiving public funds, public land or government incentives, while private agreements containing trade secrets would remain protected.
The introduction of the bill comes amid growing local and federal attention on transparency surrounding the rapidly expanding data center industry.
As AI-related infrastructure spreads into more communities, lawmakers are increasingly facing questions about their handling of negotiations that can shape local economies, utility systems, and land use.
Newsweek*’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.*
Contact Newsweek editors on this story: Tobias Meyjes and James Debens
View 0 Comments
Submit Correction
View Editorial & AI Guidelines