NDAs are hiding data center deals, drawing ire from locals — and attention from lawmakers
Short summary
Louisiana officials used nondisclosure agreements to hide details of a $3.6 billion data center project from residents until construction had already started, sparking anger and prompting lawmakers in multiple states to consider banning the practice. The company and officials claim NDAs are necessary for competitive advantage and securities compliance, but transparency advocates argue they give corporations unfair leverage while shutting out the public from decisions affecting their communities.
- At least 54 NDAs have been signed by Louisiana officials on various projects since early 2024, with researchers finding NDAs used in at least 25 of 31 data center projects surveyed in Virginia—suggesting the practice is standard across the country.
- The Delta Forge 1 data center will draw 300 megawatts of electricity (enough for roughly 200,000 homes) and bring 1,000+ construction jobs and 200 permanent jobs, but residents learned details only after fences went up and earthmovers started clearing the 300-acre site.
- Bills to ban NDAs for data center projects have been introduced in Michigan, Oklahoma, Kentucky, Ohio, and Pennsylvania, with Pennsylvania's governor already banning them for state agency projects; Applied Digital's CEO acknowledged the secrecy "feels sneaky to people," but justified it citing securities law and material non-public information rules.
- A nearby $10 billion data center in West Feliciana Parish proceeded without NDAs, with officials posting all agreements and land details publicly online, proving transparency doesn't require secrecy.
Full summary
A $3.6 billion data center project called Delta Forge 1 is under construction in Boyce, Louisiana, but residents only learned about it after nondisclosure agreements kept the deal secret from the public. Applied Digital Corp., a Dallas-based developer, required state and local officials to sign NDAs before discussing the project, which goes by code names "Project Lightning" and "Project Pixel." At least five state senators, the parish assessor, and every member of the industrial development board that negotiated the deal were bound by these agreements. The facility will draw 300 megawatts of electricity in its first phase—enough to power roughly 200,000 homes on a summer day—yet residents like beekeeper Foster Hensel had no chance to weigh in before construction started.
The secrecy sparked genuine anger. At a town hall in June, residents demanded answers about water usage, environmental impact, and power consumption. When officials acknowledged that a third-party environmental study wouldn't be released publicly because of the NDAs, attendees booed and shouted. Local resident Shannon McManus, a former sheriff's deputy, said he and others heard only rumors about the project and were met with silence when seeking details. The promised benefits—1,000 construction jobs and 200 permanent positions—didn't quiet the frustration over being excluded from decisions affecting their community.
This practice isn't unique to Louisiana. A University of Mary Washington professor found NDAs in at least 25 of 31 data center projects surveyed in Virginia last year, and bills to ban them have been introduced in Michigan, Oklahoma, Kentucky, and Ohio. Pennsylvania's governor recently banned their use on data center projects. Officials defend NDAs as necessary for competitive economic development—companies won't negotiate without confidentiality protections, they argue. But transparency experts counter that the agreements give developers an unfair advantage as they shop for deals across states, controlling information to maximize their leverage. Louisiana's track record on transparency is particularly weak, according to researchers, making the secrecy especially consequential.