Amazon and Microsoft will not use non-disclosure agreements (NDAs) when discussing data centre construction with U.S. local governments. The move aims to improve transparency in negotiations and ease residents' distrust as community backlash grows against the expansion of AI infrastructure.

TechCrunch reported on Oct. 11 that Amazon said it had stopped using NDAs with government agencies as it recently announced measures to contribute to local communities related to its data centre business. Microsoft earlier disclosed the same policy.

An NDA is an agreement that prevents contracting parties from disclosing information learned during negotiations to outsiders. In the data centre business, it has been used to keep site selection, development terms and the identity of operators confidential.

The problem is that secret negotiations have fuelled residents' distrust. As concerns rise over data centres' power and water use and their impact on property values, cases have emerged in which it is hard to know even that a project is being pursued or who the actual operator is. The outlet said, "A substantial number of data centre projects have effectively been negotiated in secret," adding, "This practice has been a major factor in growing backlash against the industry."

Across the United States, regulations that temporarily halt data centre development are also spreading. San Francisco recently deferred approvals for new data centres for 45 days, and New York state suspended new permits for large data centres for up to 1 year to review environmental impacts.

Still, questions are being raised about the effectiveness of the regulations. The outlet said data centres can take 2 to 5 years to become operational, meaning short-term deferrals may have a limited impact on advancing projects. It added that while scrapping NDAs may not immediately resolve residents' opposition, it could be a first step toward rebuilding trust.

Amazon also announced plans to invest an additional at least $1 billion over the next 5 years in local communities where its data centres are located. Attention is on whether the industry can ease conflict over data centre development as it abandons secret negotiations and begins communicating with residents.