No one talking about a datacenter could be a sign one is coming
- Reference: 1769367614
- News link: https://www.theregister.co.uk/2026/01/25/datacenters_nda/
- Source link:
“Each one of these projects is still a big deal for us,” Cummins told The Register . “When we do NDAs, it's really specifically about trading in our public shares. We’re trying to protect people from the insider trading laws of the country because not everyone knows that, 'Hey, I've got insider information on a company,' and then they go trade in it, and then you get in trouble.”
The practice is increasingly common among tech companies, with [1]Amazon frequently criticized for using [2]them . It's become controversial for locking voters out of discussions about large, community-shaping projects that sometimes bring jobs, but can also come with tax breaks, environmental impacts, and energy and water usage that erode the upsides.
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“Wealthy tech companies talk a big game about economic development. In reality, they’re using NDAs to quietly secure massive tax breaks and public subsidies, depriving local communities of critical resources,” Deanna Noel, campaign director with the nonprofit consumer advocacy group Public Citizen, told The Register . “The public shouldn’t be expected to pay the price for datacenter expansion, and we deserve a seat at the table—not to be blocked by NDAs.”
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Cummins, co-founder of Applied Digital, is currently juggling at least 11 datacenter projects in sites across the US, navigating construction costs, power generation, and the sale of long-term leases to the world’s largest and most valuable companies.
Between that and hosting quarterly earnings calls for his Nasdaq-listed company, a former crypto-mining outfit with a market cap of $10.6 billion, a portion of his time last year was spent at town meetings convincing locals in Harwood, North Dakota, a community of about 800, that his $3 billion project to build a 280 MW datacenter was a good idea.
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“They overwhelmingly supported the project,” he said. “I sat in and answered questions around people who had legitimate concerns that what was next door to them, talked about exactly what it was. And I would say the people, from a percentage perspective, 98 or 99% of the people really wanted the project there, but you had a whole bunch of interveners, not from a legal perspective, but people who had a lot of opinions that did not even live in that state, and so, you deal with that.”
There was pushback around noise, the 900-acre plot size, water use and energy costs. There was [7]anger directed towards local officials, including Mayor Blake Hankey, for signing NDAs with Applied Digital, which prevented them from sharing details about the project with the voters who elected them.
Hankey did not respond to several messages seeking comment, but he told a local news affiliate that he first learned of Applied Digital’s plans in July, a month before the public was told. He signed an NDA to keep the datacenter under wraps until it was announced on August 19.
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“Because they’re a publicly traded company, they’re subject to SEC violations, so I did have to file a non-disclosure agreement. So I was not allowed to talk about it until it was announced publicly,” he [9]told KMSP-TV Fox 9 during an interview.
Pat Garofalo, director of state and local policy at the American Economic Liberties Project, and author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, said that explanation doesn’t hold up.
“My view is that the use of non-disclosure agreements in these deals is corrupt. Full stop,” he told The Register on Friday. “You are requiring public officials whose duty is to the public, whose duty is to being good stewards of public resources and making the right decisions for the community, and you are making it explicit that they cannot tell their constituents who voted for them, who pay their salaries, what is going to happen in the community.”
Datacenters are the latest instance in which NDAs are used to quell potential dissent, but he said Amazon and Google – companies that Applied Digital has said it is either courting or working with – have also used the same method. Garofalo, who has been studying the topic for a decade, said tying the NDAs to SEC disclosures is a new justification.
“That’s very cute that they’re getting into these insider trading allegations,” he said. “From what I’ve experienced and from what I’ve seen, the very explicit purpose of these non-disclosure agreements is so that the community doesn’t know what’s happening until it’s too late in places where they think there will be pushback on one of these projects.”
[10]Former crypto-mining company building 430 MW datacenter in secret location for secret client
[11]Power scarcity drives datacenters to Texas, where the juice is
[12]Trump promises nuclear datacenter permits in 3 weeks, calls Greenland 'big beautiful ice'
[13]Trump says Americans shouldn't 'pick up the tab' for AI datacenter grid upgrades
Noel cowrote a research [14]paper , Reining in Big Tech: Policy Solutions to Address the Data Center Buildout, last year. She told The Register that companies hide behind NDAs to “milk communities dry.”
“NDAs act as community gag orders, giving some of the world’s richest corporations carte blanche to build what they want, where they want, and how they want — often in lockstep with a Trump-administration agenda focused on expanding fossil fuel production while blocking the clean energy transition,” she said via email. “State and local policymakers must prohibit or strictly limit NDAs in datacenter deals. Communities deserve to know who’s building in their backyard — and what the consequences will be.”
Cummins disagrees, telling us in response to these allegations, "We don't sneak around to try to get deals done."
Applied Digital hosts public meetings, carries out site assessments, and impact surveys to judge how construction and ongoing operations might play out in the community, also taking into account school schedules, traffic patterns, and environmental concerns.
“The impact is wildly positive overall, but are there going to be some headaches during construction? A hundred percent,” he said. “We go in there with plans that are very detailed, because people who live there want that detail. Where are the routes that the trucks will run through? Where are we going to see congestion? How are you dealing with it? What time of day?”
In Harwood, after a heated public meeting that moved to larger rooms to accommodate the crowds, Applied Digital won the zoning approvals needed to begin construction. But Cummins said the community reaction has changed his approach to the company's next projects.
This week, Applied Digital announced that it has [15]broken ground on a 430 MW datacenter , however this time the only information about the location is that it is in a southern US state. He said the outfit would share more information in February.
“You’ll see we’re not circumventing public comments or anything of that nature,” he said.
Cummins, whose company is building or has plans to build in North Dakota, South Dakota, Texas, as well as some unnamed southern US states, said he grew up in a small town and said he understands the concerns.
“So far all of the towns that we go to have been the same slowly dying places that are struggling to pay for their own infrastructure. And then these projects completely reverse the fortunes of a town, by the way, without changing the makeup of the town,” he said. “We bring a few hundred permanent jobs, which is the perfect sizing for this. We don’t bring in 10,000 which would completely transform that. People live there for a reason. They just want it to be a little better. They want the infrastructure paid for. They want the school paid for. And what we do, does all that. There is some headache around construction, though.” ®
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[1] https://www.wsj.com/articles/after-amazon-hq2-some-lawmakers-question-nondisclosure-requirements-1543228202
[2] https://www.economicliberties.us/our-work/ban-secret-deals-how-secret-corporate-subsidy-deals-harm-communities-and-what-to-do-about-it/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aXaglQikQXIQDYnSZ2DzlAAAAQs&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aXaglQikQXIQDYnSZ2DzlAAAAQs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aXaglQikQXIQDYnSZ2DzlAAAAQs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aXaglQikQXIQDYnSZ2DzlAAAAQs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://northdakotamonitor.com/2025/08/25/data-center-proposed-for-harwood-prompts-anger-questions-from-community-members/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aXaglQikQXIQDYnSZ2DzlAAAAQs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.youtube.com/watch?v=ENvF_Bq4JbE
[10] https://www.theregister.com/2026/01/23/applied_digital_secret_datacenter/
[11] https://www.theregister.com/2026/01/20/texas_datacenter_hotspot/
[12] https://www.theregister.com/2026/01/21/american_genius_says_dont_panic/
[13] https://www.theregister.com/2026/01/13/trump_datacenter_power_costs/
[14] https://www.citizen.org/article/reining-in-big-tech-policy-solutions-to-address-the-data-center-buildout/
[15] https://www.theregister.com/2026/01/23/applied_digital_secret_datacenter/
[16] https://whitepapers.theregister.com/
"We won't tell the public anything
But we are being transparent"
The guy's nose could be used as a space elevator.
Such shenanigans is explicitly prohibited this side of the pond. In the UK something that kind of size would require an EIA, which the law requires to be published in the local paper as well as physical signs at the proposed site. Smaller and change of use requires notifying the neighbours, which can be letters instead of signs.
That doesn't stop developers trying though, they regularly ask for meetings with the local government to be held "in camera" prior to the formal planning application. Entirely to make the false claim that they've "engaged with the locals"
Re: "We won't tell the public anything
Though the engagement with the locals in the UK is just theatre. Whether something is going to be build depends more on wine and steak than objections from the unwashed.
Re: "We won't tell the public anything
@Richard 12
In the UK the very biggest developments (airports seaports etc) are schedule 1 and without exception they must do an EIA (Environmental Impact Assessment). All other developments (such as datacentres) are schedule 2 and with them it depends on whether or not the development is likely to have a significant impact on the environment or not.
There's no requirement to publish an EIA in any newspaper - and I'd be amazed if it's ever been done. Are you thinking of planning notices perhaps?
Re: "We won't tell the public anything
"In the UK something that kind of size would require an EIA,"
I don't think they're concerned with the UK. The el Reg's USian focus reporting.
Shh... Don't let the pleb know.
The “this is about insider trading” justification collapses on contact with reality.
An NDA does not prevent insider trading. It does not stop anyone buying or selling shares. It does not create a safe harbour under securities law. At best, it creates silence. At worst, it gives a false sense of compliance while doing nothing to address the actual legal risk.
If the concern were genuinely securities regulation, the remedy would be narrowly targeted trading restrictions or disclosures, not sweeping gag orders that conveniently cover zoning, tax incentives, infrastructure commitments, and environmental impact. Securities law governs market behaviour, not land-use transparency.
What these NDAs actually do is control timing. They delay public scrutiny until the project is politically and financially difficult to challenge, then reframe opposition as unreasonable or “too late”. The insider trading story is just a respectable wrapper for that delay.
The contradiction remains glaring. We are told these projects are unambiguously beneficial, yet communities must be kept in the dark while decisions are made on their behalf. If the case were as strong as claimed, secrecy would be unnecessary.
That should worry anyone who still thinks public officials work for the public and not for corporations.
Re: Shh... Don't let the pleb know.
Agree, if anything it enables "insider" trading. The mayor can either directly, or if has a brain thru friends, can trade on what is now non-public info. If the info is out in the open, their is no "insider" to trade.
Swiss cheese of IT
Knowing how leaky IT systems are I doubt insider information stays secret for more than a few hours.
There are probably specialized hacker groups just for that. And they make more money than crypto scam.
Therefore the solution for public orgs is transparency. No NDAs.