Hyperscale AI data centers are popping up all over the United States, promising economic benefits and technological advancement. However, a growing concern is that non-disclosure agreements (NDAs) are keeping the very communities affected by these massive projects in the dark about crucial details. Major tech companies are reportedly using these agreements to shield information from landowners and public officials, offering only limited insights in exchange for potential economic gains.
Secrecy Surrounds Land Deals
Consider the case in Mason County, Kentucky, where Dr. Timothy Grosser and his son were offered $10 million for their 250-acre farm – a price significantly higher than local market rates. The potential buyers, representing a “Fortune 100 company,” refused to disclose their identities and insisted on an NDA. This contract would have restricted the Grossers from discussing the project’s purpose, timeline, or size, offering only vague details. The Grossers refused to sign, but 18 out of 20 other landowners in the area did, selling their land under similar secrecy.
Months later, county officials revealed that Mason County was selected for a large data center project. This lack of transparency, fueled by NDAs, is becoming a pattern. A review of over 30 proposals across 14 states found that local officials frequently sign NDAs and work with shell companies, often concealing project details from their constituents.
Democracy vs. Corporate Deals
Critics argue that this secrecy undermines democratic principles. Pat Garofalo from the American Economic Liberties Project stated, “That violates a very fundamental norm of democracy, which is that they are answerable first to the voters and to their constituents, not to some secret corporation that they’re cutting deals with in the back room.” This approach prioritizes corporate interests over public accountability.
On the other hand, some local officials defend signing NDAs as a necessary step to attract businesses and secure development opportunities. Mason County Attorney John Estill explained, “Either you want your government to be courting businesses and looking for development in your communities or you don’t… And if you want them to be courting businesses and looking for growth in your local economies, then unfortunately, NDAs are part of the landscape.”
Community Concerns and Environmental Impacts
Beyond transparency issues, residents are raising serious concerns about the environmental and social impacts of these data centers. Reports indicate that the increased demand for power from data centers is driving up electricity costs for consumers, sometimes by as much as 80%. Communities are also worried about visual disruption, noise pollution, strain on infrastructure, and potential declines in property values.
In some cases, like with Elon Musk’s xAI in Memphis, Tennessee, there are allegations of air pollution disproportionately affecting predominantly Black neighborhoods. Similarly, Meta’s planned data center in Richland Parish, Louisiana, has residents concerned about rising energy bills and water shortages, with the approval process appearing rushed. Researchers warn that Big Tech is increasingly targeting underserved communities in the South, leveraging potential power imbalances to push through projects that may harm local populations economically, environmentally, and democratically.
What are your thoughts on the use of NDAs in securing data center projects? Should communities have more transparency regarding these developments? Share your views in the comments below!
