Amazon Web Services (AWS) has overhauled its public-sector engagement strategy by formally ending the use of non-disclosure agreements (NDAs) with state and local government agencies. The policy change, confirmed by AWS CEO Matt Garman in a corporate address and policy post outlining the company’s updated Data Center Commitment, removes a standard practice long used by major technology firms to negotiate land acquisitions, zoning variances, water permits, and municipal tax incentives in private.
Over the past decade, hyperscale cloud and artificial intelligence infrastructure developers—including Amazon, Microsoft, Alphabet, and Meta—frequently required municipal planners, economic development councils, and elected county officials to sign strict NDAs before project details were disclosed.
These agreements often prevented public disclosure until real estate options were secured and initial permits were drafted. The lack of early public visibility generated significant community pushback, with environmental advocates, local taxpayers, and civic groups arguing that public servants were bound to corporate secrecy while negotiating long-term commitments for local water and electricity grids.
The Pressure Points: Why AWS Stepped Back
[ FORCES TRIGGERING THE AWS NDA RETREAT ]
CIVIC PUSHBACK & MORATORIUMS CONGRESSIONAL & ACTIVIST OVERSIGHT
┌───────────────────────────────┐ ┌───────────────────────────────┐
│ • >100 local data center │ │ • Rep. Jamie Raskin sends │
│ moratoriums under review. │ ───────────► │ inquiries to Big Tech on │
│ • Cities like South Bend, IN │ │ government NDAs. │
│ proactively banned NDAs. │ │ • Activists (Erin Brockovich) │
│ • Grid pricing protests rise. │ │ target lack of transparency.│
└───────────────┬───────────────┘ └───────────────┬───────────────┘
│ │
└──────────────────────┬───────────────────────┘
│
▼
[ AWS POLICY OVERHAUL ]
• Zero NDAs with government agencies on projects
• Direct public consultation and town-hall data
• Launch of $1B "Built Together" community fund
1. The Proliferation of Municipal Moratoriums
Garman highlighted that more than 100 data center moratoriums or zoning freezes are being considered by local governments across the United States. Jurisdictions that initially welcomed hyperscalers are pausing new permits due to strained water tables, substation capacity shortages, and resident frustration over opaque decision-making.
In Indiana, South Bend’s Common Council and executive leadership passed ordinances barring public officials from signing corporate NDAs on economic projects, while neighboring cities like Evansville weighed mandatory multi-month freezes on data center applications.
Garman framed the domestic opposition as a risk to broader technological leadership, warning that local development freezes could slow American progress in artificial intelligence infrastructure.
2. Congressional and Civic Inquiries
The policy reversal also followed federal scrutiny. Representative Jamie Raskin, ranking member on the House Oversight and Judiciary committees, issued letters to major technology operators questioning the legality and ethics of using commercial confidentiality agreements to restrict public officials from answering constituent questions about utility loads, tax abatements, and environmental permits.
Prominent environmental advocates, including Erin Brockovich, have pointed to NDAs as a primary grievance, observing that residents frequently discover multi-gigawatt facilities only after municipal permits have already been approved.
The “Built Together” Initiative: A $1 Billion Community Fund
To pair regulatory transparency with financial investment, AWS introduced “Built Together,” a five-year, $1-billion community investment framework tailored for regions hosting its hyperscale campuses:
+─────────────────────────────────+──────────────────────────────────────────────────────────+
| Focus Area | Strategic Objective & Investment Scope |
+─────────────────────────────────+──────────────────────────────────────────────────────────+
| Education & Workforce Training | STEM curricula, cloud certifications, and technical apprenticeships|
| Energy Affordability Programs | Subsidizing clean grid interconnects and community rate relief|
| Water & Resource Conservation | Modernizing municipal water plants and agricultural recycling|
| Local Municipal Priorities | Upgrading fire/emergency response services and secondary roads|
| Five-Year Capital Commitment | In excess of $1 Billion total deployment |
+─────────────────────────────────+──────────────────────────────────────────────────────────+
Under the program, AWS plans to fund local educational and technical training programs, support community microgrids, and invest in regional infrastructure—such as wastewater treatment plants and emergency service upgrades—to offset the municipal demands created by server facilities.
Rebutting Common Data Center Criticisms
Alongside the policy changes, Garman addressed several common criticisms regarding the operational footprint of large data centers:
[ AWS OPERATIONAL DEFENSE ]
DIRECT WATER CONSUMPTION GRID COSTS & POWER DEMAND
┌──────────────────────────────────────┐ ┌──────────────────────────────────────┐
│ • Garman cited Amazon research │ │ • Regional electricity price hikes │
│ showing data center water is │ ────► │ are tied to legacy utility grids │
│ only 0.5% of U.S. industrial use. │ │ lacking long-term transmission. │
│ • "Orders of magnitude below golf │ │ • AWS funds dedicated substations │
│ courses and almond agriculture." │ │ to limit community cost spillovers.│
└──────────────────────────────────────┘ └──────────────────────────────────────┘
- Water Consumption: Responding to concerns that cooling towers deplete potable municipal water, Garman cited an internal Amazon technical study showing that direct data center cooling accounts for roughly 0.5% of total industrial water usage in the United States, asserting that consumption levels are significantly lower than agricultural irrigation or municipal golf courses.
- Electricity Rate Increases: Addressing complaints that power-dense server campuses drive up residential utility bills, Garman argued that rising retail electricity rates stem from aging grid infrastructure and deferred utility transmission investments rather than modern industrial loads alone.
- Operational vs. Permitted Emissions: On environmental emissions, AWS contended that critics frequently evaluate maximum theoretical backup generator capacities instead of actual operational hours, pointing out that backup diesel units run primarily during brief monthly test cycles.
What Happens Next: Industry Implications
The shift by the world’s largest cloud provider sets a new precedent for hyperscale infrastructure procurement:
[ INDUSTRY TRANSMISSION CHANNELS ]
PEER PRESSURE ON HYPERSCALERS TIGHTENED LOCAL SCRUTINY
────────────────────────────────────── ──────────────────────────────────────
• Puts competitive pressure on Microsoft, • Municipalities will expect earlier public
Google, and Meta to drop government NDAs disclosures, open hearings, and binding
for new data center builds. environmental covenants.
• Commercial and private-sector vendor • Greater focus on independently verified
NDAs remain standard business practice. water recycling and power offsets.
- Impact on Competitors: Industry observers will monitor whether competing hyperscalers—such as Microsoft Azure and Google Cloud—follow AWS in formally disavowing government-facing NDAs, or whether they continue utilizing confidentiality clauses in competitive economic bidding.
- Private-Sector Boundaries: The policy change applies specifically to government agencies and municipal bodies. AWS confirmed that standard commercial NDAs with private landholders, utility providers, construction contractors, and technology vendors remain active to protect proprietary system architectures and intellectual property.
Frequently Asked Questions
Why did AWS decide to stop using NDAs with government agencies?
AWS ceased using non-disclosure agreements with government agencies to address growing public criticism and distrust over the lack of transparency in data center planning. Over 100 U.S. municipalities have considered moratoriums on new data centers due to concerns over secret negotiations, water usage, and electric grid impacts.
Does this apply to all AWS business dealings?
No. The ban on NDAs applies specifically to negotiations with government and municipal agencies regarding data center development. AWS will continue to use standard commercial NDAs when dealing with private partners, suppliers, utility contractors, and corporate vendors.
What is the “Built Together” program?
“Built Together” is a five-year community investment initiative announced by AWS CEO Matt Garman. The company plans to deploy over $1 billion across data center host communities to support local education, workforce development, energy affordability, water conservation, and civic infrastructure.
How did AWS respond to concerns about water and power consumption?
AWS CEO Matt Garman stated that direct data center water consumption represents only 0.5% of U.S. industrial water usage, comparing it favorably to golf courses and agriculture. On energy, he argued that rising utility rates are primarily driven by aging electrical grids rather than data centers, adding that AWS finances dedicated transmission upgrades.
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