Following Microsoft’s precedent, Amazon announced its decision to cease using nondisclosure agreements (NDAs) in discussions with local authorities regarding data center projects.
During a recent installment of TechCrunch’s Equity podcast, Sean O’Kane, Rebeccan Bellan, and I explored Amazon’s disclosure, which was embedded within a comprehensive blog post advocating for the community benefits of data centers.
Rebecca expressed some doubt regarding the long-term impact of recent data center moratoriums, noting their typical one-to-two-year duration, while new data centers won’t be operational for “the next two, three, four, five years.” I, however, argued that supporters of data centers appear genuinely concerned.
Sean, conversely, proposed that a significant factor contributing to the public opposition stems from the industry’s inadequate communication.
He stated, “The numerous controversies and public resistance surrounding AI and data centers highlight the industry’s persistent failure to articulate its purpose effectively. They are evidently and perpetually vexed by the public’s inability to grasp the utility of these technologies.”
Continue below for an excerpt from our discussion, refined for conciseness and understanding.
Sean O’Kane: It’s noteworthy how this was embedded within Amazon’s broader narrative in their blog post. While I grasp the decision not to highlight it prominently, I believe this issue lies at the core of many challenges currently confronting the tech industry, particularly concerning data centers and AI in general.
Much could be debated regarding public concerns about the impact of data centers on property values, utility costs, and local water consumption, and whether these issues are genuine or overstated.
A significant portion of this, in my view, traces back to the clandestine nature of many project negotiations. Often, the public might be aware of a data center, yet remain ignorant of its eventual users or occupants.
This pattern is not new within the tech sector. I recall the mid-2010s, during Uber’s rapid expansion, where they frequently employed similar tactics when engaging with local administrations. Specifically, while at The Verge, I remember a freelance piece detailing Uber’s efforts to secure tax incentives in an Orlando-area city to subsidize public transit use following an Uber ride.
The entire arrangement was conducted covertly. Beyond the inherent frustration of this secrecy, it also enabled Uber to become increasingly emboldened in its demands for additional concessions.
Such transparency is crucial. I commend Amazon’s move, though its actual positive impact remains to be seen, as public sentiment is quite solidified at present.
Rebecca Bellan: Indeed, I’m keen to observe the consequences of this and if it empowers communities to effectively postpone or halt essential infrastructure projects. From my discussions with daily data center professionals, many of the enacted moratoriums—and there are quite a few, including a recent, somewhat ironic one in San Francisco—are typically limited to one or two years.
However, these data centers aren’t slated for activation for another two, three, four, or five years. Construction is already subject to considerable delays due to various factors like zoning and financing. While sustained public opposition could certainly have an impact, I frequently question the true extent of this political resistance’s influence.
Anthony Ha: I’m most acquainted with New York’s moratorium, which I understand to be a one-year halt on permits for significant undertakings. [More precisely, it’s until the state concludes an environmental review, projected to last a year.]
This inherently allows for flexibility. Such moratoriums are frequently presented not as a rejection of data centers, but as a need for a study period, thus creating ample opportunity for a subsequent declaration of approval.
Nevertheless, the concern among data center developers is palpable, evidenced by fervent social media posts from figures like Trump or David Sacks. While the longevity and intensity of community opposition remain uncertain, my impression is that they are indeed apprehensive.
It’s also significant that Microsoft, earlier in the year, issued a comparable statement regarding the discontinuation of NDAs. While I don’t believe simply eliminating NDAs will instantly sway opponents of data centers to full acceptance, it marks a crucial initial step in addressing concerns about clandestine negotiations.
Sean: Fundamentally, this is a communication issue, isn’t it? This challenge pervades the entire tech sector but is particularly pronounced today, given the prevalence of “direct communication” and the sentiment that “the media is obsolete.”
I’m not aiming to belabor that point, as we are part of the media and believe in our continued relevance. However, numerous controversies and public opposition to AI and data centers demonstrate the industry’s consistent failure to articulate its value proposition. They are clearly and perpetually exasperated that the public struggles to imagine the utility of these advancements, partly due to nascent technological capabilities and partly due to inadequate explanations.
Last week, I penned an article noting how a year has passed since Tesla last significantly promoted its mission of achieving what was initially termed “sustainable abundance” and is now “amazing abundance.” It strikes me as incredible that, after a year, the company still lacks a precise definition for this concept, particularly given that they issued a multi-page PDF outlining it upon its announcement. Even devoted Tesla enthusiasts criticized Elon Musk and the company for its vagueness, likening it to incoherent AI-generated text.
Anthony: This discussion has prompted me to reflect on the prevalent narrative that, for some time, felt imposed upon us—the notion of an “inevitable, AI-driven future” where one must either embrace it or be rendered obsolete.
While this future is clearly progressing rapidly in many aspects, it has encountered significant impediments in certain crucial areas. What I find particularly positive about this is the emerging sentiment that “you must genuinely advocate for it.” Simply declaring, “This is the future, accept it,” is no longer sufficient.
Regarding Tesla’s concept of abundance, what astonished me wasn’t so much the absence of a clear definition, but rather that such a promise was made at all. This, I believe, underscores the peculiar nature of our relationship with Tesla, especially among its dedicated investors and ardent supporters of Elon. The focus has shifted from the company’s vehicle sales to a grand vision of societal transformation—or at least, that’s the narrative being presented to them.