US Cities and States Ban Data Center NDAs and Moratoriums
Local and state governments across the US are implementing moratoriums and banning nondisclosure agreements to manage the rapid expansion of AI data centers.
Municipalities and state governments across the United States are increasingly implementing construction moratoriums and banning nondisclosure agreements (NDAs) to manage the surge in AI data center development. These measures aim to evaluate the impact of high-energy facilities on electrical grids, water supplies, and local tax structures.
Josh Shapiro, Governor of Pennsylvania, signed an executive order on August 18 banning NDAs for data center development. Similarly, Governor Maura Healey of Massachusetts issued an executive order banning NDAs between state agencies and developers, while requiring developers to secure formal local approval and community benefits agreements. In Oregon, the Salem City Council banned NDAs on September 14 and approved a four-month pause on construction, halting a project by Verrus, LLC.
Other regions have adopted similar pauses. Leominster, Massachusetts, voted unanimously on September 29 for a one-year moratorium, following a similar move by Lowell in March. The Mesa County Board of Commissioners in Colorado also approved a one-year moratorium on September 29 for unincorporated areas. More recently, the government of Oakland is considering a 45-day moratorium to evaluate environmental and financial impacts.
At the federal level, Representative Jamie Raskin has demanded information from companies including Google and Oracle regarding their use of NDAs with government officials. Raskin and his colleagues have introduced legislation to limit these agreements, arguing that secrecy prevents residents from holding officials accountable. While the Data Center Coalition argues NDAs protect proprietary information, critics link the facilities to rising power prices and high water consumption.
