Data Center NDAs Face Scrutiny as Developers Balance Secrecy and Public Pressure

In an interview with Law360, Real Estate partner Adam Weaver said confidentiality helps developers and landowners maintain a competitive advantage while negotiating the most favorable deal possible. He noted that states and local governments are also competing against one another for private investment, making them hesitant to disclose incentive packages before agreements are finalized.

“The developer needs to know that their information is going to be protected and not released to competitors,” he said. “And the localities, the counties and the state economic development organizations want the ability to talk openly about job numbers and investment and all of these things they want to move the scale on.”

Weaver, who also co-leads Pillsbury’s Data Centers & Digital Infrastructure practice, added that public controversy surrounding a project may prompt state and local officials to seek more favorable terms from developers.

“If anything, I think the hullabaloo from the public may likely translate to the economic development authorities asking for more things,” Weaver said. “They may think, ‘OK, I was going to give you a package, but we need more jobs here, or we need more financial investments where we have tax revenue coming in.’”

Although NDAs remain common in the data center industry, some companies are narrowing their scope and prioritizing community outreach, as attorneys warn that prolonged secrecy can generate rumors, public distrust and opposition to projects.

“I think over the past five-plus years, these are just standard operating procedures,” Weaver said. “I don’t think anything has really changed, given some of the shifts in public opinion more recently.”

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