Microsoft announced last week it would stop signing nondisclosure agreements that keep its data center proposals secret, a move that received praise from open government advocates.
Less attention was paid to the other party to those NDAs: local governments.
“Hopefully, the industry follows,” said Wisconsin state Rep. Clint Moses, R-Menomonie, where the city signed an NDA, then put a proposed data center on hold. Microsoft “just realized that it’s not a successful formula when you come into a community under darkness.”
Moses said a bill he introduced to ban data center NDAs, which stalled in the Legislature, is still needed to prevent local governments from signing the agreements. If local officials sign them, “hopefully voters will remember it and hold them accountable,” he said.
Microsoft did not sign NDAs in the Racine County communities of Mount Pleasant, where a multibillion-dollar data center complex is under construction, or in Caledonia, where it withdrew a data center proposal amid community opposition. But its announcement comes at a time of public backlash against data centers proposed in Wisconsin.
The company said its new position on NDAs is an effort toward transparency “as we continue to build trust with the communities around the world in which we operate, and that it would work with local governments to terminate current NDAs. Microsoft has one in Kenosha, where a data center is proposed.
Microsoft did not respond to a request for further comment.
Its move won qualified praise from data center NDA critics, such as Midwest Environmental Advocates. “Companies typically don’t make announcements about building community trust unless those communities are already pushing back pretty hard,” the group said in a statement.
Sheboygan Falls Mayor Randy Meyer, board president of the League of Wisconsin Municipalities, said municipalities feel pressure to sign NDAs because they need new development to increase tax revenue. It can be difficult to know when in the planning process a development proposal should be disclosed to the public, he added.
But “if the companies that are building data centers say there’s nothing wrong with them, they don’t hurt the environment, all that stuff, well, then there’s no real reason to be secretive about it,” Meyer said.
Bill Lueders, president of the Wisconsin Freedom of Information Council, also praised Microsoft’s move, which happened during Sunshine Week, which promotes public access to government meetings and records.
But Lueders encouraged local government officials to be more transparent.
“There’s nothing the public hates more than the idea that their public officials are doing things behind their back,” he said. “That’s like the most offensive thing that you could do as a public official is hide information that affects the people you represent.”
Wisconsin Watch has reported that at least five Wisconsin communities signed data center NDAs. In one of them, Beaver Dam — where an NDA was signed more than a year before the proposal was announced — a $1 billion Meta data center is under construction.
Meta declined to comment on Microsoft’s announcement.
Vantage Data Centers, which is building a $15 billion data center in Port Washington with Oracle and OpenAI, did not reply to a request for comment.
The push to build data centers nationwide has meant more than $1 billion in business for Wisconsin suppliers, even before any of the hyperscale data centers in Wisconsin begin operation.
The data centers proposed or under construction in Wisconsin typically cost billions of dollars and cover hundreds of acres.
Some communities that have not signed NDAs have taken other steps to keep data center proposals quiet.
The Madison suburb of DeForest dropped a proposed $12 billion data center in January, the day after Wisconsin Watch reported that village staff worked for at least seven months with Virginia-based QTS Data Centers before the proposal was publicly announced in October.
Wisconsin Watch also found that in Port Washington, when citizens requested emails about the data center, the city turned over emails but withheld documents that were attached to the emails — something a judge found did not follow the state open records law.
Blaine Halverson, a leading opponent of the proposed data center in Menomonie, said Microsoft’s announcement is a step, but he remains skeptical.
“I think that committing to not doing NDAs does not mean they’re not committed to still being secretive,” he said.
“What the pledge needs to be (is) that we’re going to not just not use NDAs. We’re going to be up front. We’re going to encourage and allow free communication from the beginning with communities. And we’re going to insist on being available to answer the public’s questions from the front end. That’s what needs to happen.”
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