Amazon recently announced that it will no longer use non-disclosure agreements (NDAs) in negotiations with local governments over data centers, following in the footsteps of Microsoft.
On the latest episode of TechCrunch’s Equity podcast, Sean O’Kane, Rebecca Bellan, and I discussed Amazon’s announcement. The announcement came in the middle of a lengthy blog post arguing that data centers are actually beneficial to the community.
Rebecca was a bit skeptical whether the recent spate of data center moratoriums would have a lasting impact, especially since the moratoriums only last a year or two and “these data centers aren’t going to be up for the next two, three, four, five years,” but I countered that data center backers definitely seem concerned.
Meanwhile, Sean suggested that a big reason for the backlash is a lack of communication in the industry.
“We’ve seen through a lot of the controversy and the backlash against AI and data centers that this industry is clearly and consistently frustrated with the fact that it doesn’t really explain itself well, and that most people can’t imagine a world in which these things would work for them,” he said.
Continue reading for a preview of the conversation, edited for length and clarity.
Sean O’Kane: What’s interesting is that it was buried in a blog post and was part of a larger story that Amazon was obviously trying to tell. I think I understand why they haven’t brought it to the forefront, but to me, this is at the root of many of the issues the tech industry is currently facing with AI in general and data centers in particular.
There’s a lot that can be said about whether people should worry about the impact data centers will have on local property values, electricity bills, and water usage, and whether those are real or inflated problems.
I think a lot of that goes back to the fact that a lot of these projects are basically negotiated in secret. In some cases, it is negotiated (with the public knowing) that it is a data center, but not knowing who will actually use it or when they will occupy it.
This is a long-standing problem in the technology industry. I always go back to the mid-2010s, when Uber was expanding rapidly. Uber is one company that has actually used this tactic extensively in its work with local governments. In particular, I remember when I was working at The Verge at the time, we had a freelancer write an article about a city outside of Orlando. There, Uber was trying to negotiate tax subsidies to help people pay for public transportation after their Uber ride.
Everything was negotiated in secret. And as much as it’s frustrating on the surface, you can see that Uber is very used to asking for a lot of other things, thanks to its secrecy.
So we need to increase this further. I’m glad Amazon is doing this. We’ll see if it actually has a positive effect, but people are pretty set in stone for now.
Rebecca Beran: Well, I’m interested in what the impact of this is and whether it leads to communities delaying or canceling the infrastructure that companies need to build. I’ve heard from several people I’ve talked to that while many of these moratoriums that deal with data centers every day are passing, there are quite a few of them, including the recent moratorium in San Francisco, which is quite ironic – but they’re only for a year or two.
But it will be two, three, four, five years before these data centers are up and running. All construction will be significantly delayed for a variety of reasons ranging from zoning to financing. Of course, if the backlash continues, it may have an impact, but I often wonder how much of an impact this political backlash is having.
Anthony Ha: The moratorium I’m most familiar with is the one in New York. It’s a one-year grace period, and I think that’s based on large project permits. (Technically, that is until the state finalizes its environmental review process, which is expected to take a year).
So there is already some room for adjustment in that. And a lot of times it’s framed as, “We don’t think[data centers]are bad, so let’s not do this. We need to take the time to study this.” So there’s a lot of room later on to say, “Actually, I decided this was great. I like it.”
But I can understand the concerns of the people who are going to build these data centers. That’s why people like Trump and David Sachs are making these calm tweets. Time will tell how long and how deep that (community) resistance is, but I think they are concerned.
It’s also worth noting that Microsoft made a similar announcement earlier this year about not using NDAs. I don’t think automatically eliminating the NDA will make the people who were against these data centers feel like, “Wow, let’s do this. I’m on board.” But I think the beginning of that conversation is, “I don’t even know what the hell you’re doing, because you’re negotiating all this stuff in secret.” So that seems like a good first step.
Sean: The bigger issue here is just a communication issue, right? I think this is an issue across the tech industry, but it’s especially acute right now. Because we live in an era of “direct negotiations” and “no need to talk to the media, the media is dead.”
And I’m not trying to beat that horse. Because we’re in the media and we think we’re still relevant. But through the many controversies and backlash against AI and data centers, we’ve seen that this industry is really bad at explaining itself and is clearly constantly frustrated by the fact that most people can’t imagine a world where something like this would be useful. That’s often because the (technical) ability isn’t there, and partly because they don’t explain it well.
I wrote last week that it’s been a year since I actually heard Tesla beating its own drum about building toward what it originally called “sustainable abundance” and now has “amazing abundance” as its mission statement. It’s completely unbelievable to me that it’s been a year since it started, but the company still doesn’t have a very good definition for it. Especially considering that when they announced this, an entire multi-page PDF summarizing it was made public, and even Tesla’s biggest fans criticized Elon Musk and Tesla for not being too specific. It reads like LLM nonsense.
Anthony: One of the things this made me think about is the story and this feeling that it really felt like being shoved down your throat for a while. The idea is, “This is inevitable, this AI-driven future, and if we don’t get into it, we’re just going to be left behind.”
Clearly, that future is moving forward in many ways, but in some important respects these obstacles have been present. What I really like about this is the sense of, “No, I actually need to claim it.” You can’t say, “This is the future, shut up.”
And specifically about Tesla and abundance, what was shocking to me wasn’t that they hadn’t found a definition of abundance, it was that this was what they were promising from the beginning. I think it speaks to how strange our relationship is with people who are invested in me and Tesla, especially Elon, and are in a ride-or-die relationship. It doesn’t matter, is this company going to sell a lot of cars? It’s about this vision to remake society. At least, that’s what’s being sold.
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