Exclusive | Tech Giants Face Questions Over Secret AI Data-Center Deals

WASHINGTON—A Democratic lawmaker wants more information on the secret agreements between tech companies building data centers and local officials approving them, their latest attempt to increase oversight of the facilities powering artificial intelligence and tap in to voters’ AI backlash ahead of the midterm elections.

Rep. Jamie Raskin (D., Md.), the top Democrat on the House Judiciary Committee, sent letters to Amazon, Alphabet’s Google, Meta Platforms and Oracle on Tuesday seeking information on the nondisclosure agreements those companies signed with government officials related to data-center build-outs, according to copies of the letters viewed by The Wall Street Journal.

“Residents cannot weigh a project’s costs against its benefits, hold their officials accountable or safeguard their own resources when the basic terms are kept secret,” Raskin wrote while demanding detailed information on each company’s data-center portfolio and use of the agreements.

Amazon said it no longer uses NDAs with government collaborators on data-center projects. The other companies didn’t immediately comment.

The questioning is an early indication of what AI companies can expect if Democrats win back power in Congress in November, a prospect that has many in the industry bracing for a wave of demands and hearings. Others including a trio that lead a House AI Commission of Democrats have targeted the sector over recent instances of models hacking other companies, while other concerns include the impact the platforms have on children.

Local communities have cited nondisclosure agreements and secrecy surrounding data-center plans as a big reason they oppose the facilities, which many blame for pushing up power prices and consuming large amounts of water. Consumers across the country have said they had little input before massive infrastructure projects were approved for construction close to their homes subsidized in some way by locals.

Broader fears about AI replacing human workers and anger at the tech industry have also driven bipartisan opposition to the data-center build-out, turning the once-obscure computer infrastructure into a major political liability.

Data centers have become a flashpoint in key races including Ohio, Michigan and Texas. Those and other states have taken steps to cut tax exemptions for data centers worth billions of dollars. A new Wall Street Journal poll found that 62% of voters support pausing data-center development.

Industry executives have said they hope to be more transparent moving forward and have committed to paying more for the power needed to run data centers and investing more in local communities. Some secrecy is needed when negotiating with local officials about the facilities to avoid revealing proprietary details that could help competitors and because contractors and other businesses working on the projects often increase prices when they find out a large AI company is working locally, executives have said.

Lawmakers across the country are scrutinizing NDA agreements to capitalize on data centers’ historic unpopularity.

Raskin, along with Reps. Greg Landsman (D., Ohio) and Tom Barrett (R., Mich.) introduced a bill last week to limit NDAs with government officials related to data-center projects. Barrett has faced criticism from his opponent. States, too, have opposed the agreements, with several introducing bills to ban data-center NDAs. Pennsylvania Gov. Josh Shapiro, a potential 2028 Democratic presidential candidate who is under pressure for previously supporting the AI boom, banned the agreements in an executive order in August.

Other past supporters of data centers who are now under pressure include Sen. Jon Husted (R., Ohio), who has faced attacks from former Democratic Sen. Sherrod Brown, his opponent in the midterm elections. Husted has sponsored a bill requiring states to consider taking steps to make tech companies cover the cost of energy infrastructure needed to power the facilities. Democrats, loath to give Husted a win ahead of the election, have opposed the measure, arguing that its voluntary structure for companies is too weak. The House recently passed its version of the bill 417-3.