Microsoft vows to end secret data center agreements with local governments

Microsoft is ending its policy of using non-disclosure agreements with local municipalities as it builds out its data centers, according to an announcement by the company on March 18.

A company statement said it “made the decision that being transparent with the communities where we operate or seek to operate is paramount. This shift is about strengthening public trust, enabling better dialogue, and ensuring that our growth is matched by meaningful engagement. ”

Transparency, or lack there of, on data center projects by technology companies has been raised as a major criticism by local residents opposed to data center projects.

For those municipalities that already have an NDA in place with Microsoft, the company said it is reaching out to those local governments to “coordinate termination.”

“Microsoft has sometimes used NDAs during early stages of data center development to help protect sensitive commercial information, address early security considerations, and ensure we can comply with local regulatory and permitting processes,” the company said. “It is a common industry practice to seek NDAs to protect early information about development proposals.”

However there are some parts of development that require proprietary information and Microsoft said it will “seek to protect such information from records disclosure to protect our business interests” where the law allows.

“We often work in close coordination with local governments to develop our designs to reflect local requirements and priorities,” the company said. “Because of this coordination and the sequential nature of our development, we may not have all development details from the beginning, but we endeavor to share information transparently when it is available.”

Rima Alaily, corporate vice president and general counsel for Microsoft, said in a LinkedIn post the company “will continue to use NDAs in connection with private transactions when  acquiring  land, and we will continue to rigorously protect our trade secrets and data center design information. But we will not use NDAs as a default mechanism in our engagement with local governments.”

Bill Lueders, president of the Wisconsin Freedom of Information Council, applauded Microsoft for taking this step.

“It’s important to note that it’s happening only after their attempts to work with these non-disclosure agreements blew up in their face,” he said.

“When people found out there was an agreement with local officials and companies to change the character of their communities, they resented it bitterly and pushed back,” Lueders said. “I think that it was pretty clear that the revelations about non-disclosure agreements was bad PR for the companies. It was not a good look and it’s not a surprise that they’re eager to move beyond that.”

Lueders believes other companies could take similar action.

“It’s likely that these efforts to work with local officials under secrecy agreements are counter productive and they need to take a different tact,” Lueders said.

Peg Sheaffer, communications director for Midwest Environmental Advocates, said the Microsoft decision is “an indicator that public opposition is gaining real traction and that the data center developers are getting nervous.”

“Companies typically don’t make announcements about building community trust unless those communities are already pushing back pretty hard,” Sheaffer said in a statement. “If you’re a community member who’s been showing up to meetings, asking tough questions, and asserting your right to open and transparent government—keep it up. You are making a difference.”

NDAs part of reason Caledonia residents opposed Microsoft

In 2025, Microsoft planned to build a data center in Caledonia, but the project involved a level of secrecy in the beginning that caused residents to oppose the development.

After hearing the outcry from residents, Microsoft decided to change course and dropped its plans.

“It doesn’t make sense to go where people don’t want us,” said Microsoft President Brad Smith said in an interview on Jan. 13. “But I do think it’s our opportunity to have the conversations in a variety of other places about what we would hope to bring to a community.”

Microsoft is finishing its first data center on its campus in Mount Pleasant, and has began construction on a second data center. So far the company has committed to about $7.3 billion to build its data center campus in the village.

Patrick Brever, deputy village administrator for Mount Pleasant, said this policy changed does not impact its relationship with Mount Pleasant.

“The village did not enter into a non-disclosure agreement with Microsoft while negotiating their investment in Mount Pleasant,” Brever said.

Microsoft has approval from Mount Pleasant to build 15 more data centers during the next 10 years.

Microsoft is on track to be Racine County‘s largest taxpayer when it pays its bills in 2026, based on 2025 assessments.

This story has been updated with additional information.

This article originally appeared on Milwaukee Journal Sentinel: Microsoft vows to end secret data center agreements with local governments

Reporting by Ricardo Torres, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel

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