Technology
NDAs shield data center project negotiations in Louisiana from public view
Local and state officials used nondisclosure agreements during talks for a $3.6 billion data center campus, sparking resident frustration over transparency and resource impacts.
The short version
- Officials in Louisiana used nondisclosure agreements (NDAs) to negotiate Delta Forge 1, a $3.6 billion, 300-acre data center campus in Boyce developed by Applied Digital Corp.
- Residents expressed anger at a June town hall over secret negotiations, undisclosed environmental studies, and potential impacts on local water and electricity supplies.
- Data center developers and economic officials argue NDAs protect corporate secrets and insider trading rules, while critics and some state lawmakers are pushing for bans on their use.
Key facts
- Negotiations for Applied Digital Corp.'s $3.6 billion data center in Boyce, Louisiana, were conducted under NDAs signed by at least five state senators, the Rapides Parish assessor, members of the England Economic and Industrial Development District (EEIDD), and Louisiana Economic Development officials.[NPR]
- The project was initially negotiated under the code names "Project Lightning" and "Project Pixel" before being publicly announced in May following EEIDD board approval in April.[NPR]
- The Delta Forge 1 campus is expected to consume 300 megawatts of electricity in its first phase and bring over 1,000 construction jobs and 200 permanent jobs.[NPR]
- Officials and company representatives told residents at a June town hall that a third-party environmental study showed negligible impacts, but they acknowledged the study would not be publicly released.[NPR]
- Applied Digital CEO Wes Cummins stated NDAs help protect material non-public information under securities laws, though other jurisdictions, such as Louisiana's West Feliciana Parish, have completed data center deals without NDAs.[NPR]
- Legislation to prohibit NDAs for data center projects has been introduced in states including Michigan, Oklahoma, Kentucky, and Ohio, while Pennsylvania Governor Josh Shapiro recently banned their use by executive agencies under his oversight.[NPR]
What remains uncertain
- The precise long-term effects of the Delta Forge 1 data center on local power grids and water supplies remain unknown to residents due to the withholding of the third-party environmental impact study.[NPR]