Amazon Ends Data Center NDAs, Pledges $1 Billion to Communities

Amazon is done asking local officials to keep quiet about its data centers. On Friday, AWS chief Matt Garman said the company has stopped using nondisclosure agreements with government agencies as it seeks approval for new data center projects.

The disclosure was one line in a longer blog post. The rest of it was Garman making the case that data centers are good for the towns that host them — and announcing a $1 billion program called "Built Together" to put money behind that claim.

Over five years, Amazon says it will spend the $1 billion in U.S. communities where it builds and operates data centers. The money would fund free community college, job training, energy upgrades for homes and schools, and local projects chosen by the communities themselves. It comes on top of more than $1 billion the company says it has already given such communities over the past three years.

Where the money goes

Amazon laid out the program in three areas: education and job training, energy and water, and flexible funding for local priorities. The company expects to put more than $100 million up front into community college endowments and roughly another $100 million into expanding its training centers.

The plan, according to Amazon: cover out-of-pocket community college costs for an estimated 300,000 students in data center communities over five years, with agreements already in the works with 26 colleges. Build 16 more training centers on or near data center sites offering free certification programs in skilled trades. Fund energy-efficiency upgrades at more than 300 schools and community buildings and more than 30,000 homes. And provide annual funding through local nonprofits and community foundations for projects like roads, parks and fire equipment.

"Every community is different," Garman wrote. "What matters most in rural Oregon is not the same as what matters in suburban Virginia or a mid-size city in Ohio."

Why the NDAs matter

The secrecy around data center deals has been the flashpoint in a year of mounting local opposition. The pattern, as described by environmental activist Erin Brockovich, is familiar: projects announced after permits are already secured, developers who don't return calls, and local officials who signed NDAs before their neighbors knew a project was being considered. Brockovich has said transparency is the number one complaint she hears about data centers.

The backlash has produced real consequences. New York put a one-year moratorium on permits for large data centers, and Garman himself wrote that more than 100 similar moratoriums are being considered across the country. Data Center Watch, a group that tracks these disputes, says at least 75 projects worth about $130 billion were blocked or delayed in the first three months of the year alone. An Economist/YouGov poll in late August found that 63% of Americans would oppose a data center in their own community.

Garman argued the opposition is fed by "misinformation and outright lies," and warned that the moratoriums threaten the country's lead in the AI race. "If these measures are enacted, the U.S. could be writing its own losing ticket to this race, and the consequences would last generations," he wrote.

The fine print

Amazon's NDA change applies going forward. The company said it does not plan to revisit past agreements, noting that most of them no longer apply once a project becomes public. Microsoft went further in March, saying it would terminate its existing nondisclosure agreements with local governments.

Microsoft also promised in January not to seek local tax breaks for its data centers. Amazon did not make that commitment. It said it is the largest taxpayer in almost every community where it operates, and that local governments offer incentives to attract its projects.

Garman also pledged to install lower-emission backup generators at new sites, publish the company's energy and water use each year, and pay enough for power to keep local electricity bills from rising. Amazon was among seven companies that signed a White House pledge in March to pay for the power and grid upgrades their data centers require.

He pushed back on four claims about data centers in the post: that they use too much water, drive up electricity costs, emit huge amounts of pollution, and give nothing back to communities. Amazon's average data center uses less than 13,000 gallons of water a day, he wrote — a figure critics will now have an annual report to check against.

The scale of the bet

Amazon is projecting about $220 billion in capital expenses this year, largely on data centers and chips. That is more cash than the business generates annually. Against that, the $1 billion community program works out to roughly $200 million a year — about one-tenth of one percent of this year's projected capital spending.

The stakes explain the urgency. Amazon's AI strategy depends on finding communities willing to host its data centers, and right now, a lot of those communities are saying no.