AI data centers, explained: Why do tech companies request NDAs? What’s a moratorium?
Residents in Salem, Oregon, opposed a proposed data center by Verrus, citing concerns over nondisclosure agreements (NDAs), noise, and electricity prices. The city subsequently banned NDAs and enacted a four-month moratorium on data center development, temporarily halting Verrus's project. This comes as NDAs and moratoriums become contentious issues across the U.S., with Pennsylvania also banning data center NDAs statewide.
Residents of Salem, Oregon, voiced strong opposition at a city council meeting following the announcement of a proposed data center by California-based tech company Verrus. Concerns revolved around a nondisclosure agreement (NDA) between the city and Verrus, which council member Vanessa Nordyke claimed she was unaware of until recently. Residents also expressed fears about constant noise, potential health impacts, and increased energy costs from the data center.
The city manager had signed the NDA with Verrus in March 2025, facilitating private discussions on the project's feasibility, utility capacity, and environmental factors. After Verrus submitted a land use application in late July, public backlash escalated. In response, Salem City Council members voted on September 14 to ban NDAs for data center development and, the following week, approved a four-month moratorium on new data center construction and approvals. This action prevents Verrus from proceeding with its project for the duration of the pause.
The use of NDAs in data center development has become a significant national issue, with experts like Eric Bonds, a sociology professor at the University of Mary Washington, and Hannah Wiseman, a law professor at Penn State University, noting their use by companies like Meta, Amazon, Google, and xAI to avoid opposition and expedite approvals. Pennsylvania Governor Josh Shapiro also signed an executive order on August 18 to ban NDAs for data center development across the state. Moratoriums, like those approved in Texas, New York, Florida, and Wisconsin, are being used by local governments to evaluate impacts before further development.