"Good-Neighbor" Commitments for Data Centers: High Compute, Low Commotion

The market is seeing technology companies reframe certain of their infrastructure investments as community partnerships, with companies pledging through "good-neighbor" commitments to support communities where they locate data centers and align environmental impacts with local interests. Commitments include Microsoft's announcements that it will "pay its own way" to help mitigate any rising electricity costs to residents as a consequence of the increase in demand on the power grid, create jobs, and minimize water use. Microsoft is also minimizing water usage through its development of a closed-loop, chip-level cooling system for data centers that circulates coolant without additional water. Meta has announced that it will provide $1 million each year for 20 years to a county rural electric community fund to help families with energy bills in Indiana, where it has broken ground on a $10 billion data center. Other action includes Google- and Microsoft-founded workforce development programs to support and promote employment in data center communities.

The Feasibility Challenge

Electricity prices have risen significantly—on average 7.8% annually in the last five years—reflecting compounding pressures from aging grid infrastructure, accelerating technological demand, and broader population and economic growth. And data center energy demand continues to climb. To ease the strain, companies point to investments in advanced nuclear projects, like Meta's venture with TerraPower and other generation technologies as part of the solution. Because some of these solutions are based on developing technology and infrastructure that does not exist yet, regulators and communities are faced with determining how progress will be measured, monitored, and enforced.

Early Scrutiny

Unlike cloud computing data center construction and usage, which proceeded for years with relatively little opposition, the unprecedented growth of AI-driven data centers is drawing scrutiny while the boom of generative AI is still in its infancy. This is because Graphics Processing Units for AI require more significant power draw and infrastructure than prior cloud data center installations. Moreover, the public and regulatory scrutiny that large tech companies have faced over the last decade on various fronts may have encouraged regulators and civic organizations to ask questions sooner rather than later about transformative technologies and their deployment.

The increased scrutiny includes a growing national network of activist groups now focused specifically on data center development and government engagement, which has resulted in President Trump's recent announcement of the Ratepayer Protection Pledge in his 2026 State of the Union Address. That pledge obligates hyperscaler and AI company signatories to develop net new power supplies and pay for the full cost of new generation resources and electricity needed as well as delivery infrastructure upgrades in a way that does not increase rates for American households. Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI are signatories to the Ratepayer Protection Pledge that is intended to help reduce the strain on the nation's electric grid and ratepayers. There is also a dramatic increase in state legislative activity, which we are covering in separate alerts.

This pressure is apparent in corporate strategy as good-neighbor narratives are embedded in initial project announcements, permitting discussions, and legislative testimony, rather than emerging only after opposition materializes.

Practical Guidance

Companies involved with developing or deploying data centers should consider the following when structuring and communicating commitments:

• Balance specificity with flexibility: Broad principles preserve operational flexibility, but specifics and concrete benchmarks will hold more weight with communities and regulators. Identify which commitments can be specific and which require flexibility and decide whether specifics should be included in good-neighbor commitments.
• Use interim milestones in longer term deployments: Good-neighbor commitments extending into the next decade or later should be clearly presented in public statements as long-term projects. Where possible, defining measurable interim milestones will enable companies to demonstrate progress and maintain credibility.
• Manage expectations explicitly: Clearly distinguish what is possible to be delivered with today's technologies, or infrastructure, from what depends on future inventions, progress, or grid developments. Ambiguity can become a source of stakeholder frustration and reputational risk.

Looking Ahead

Good-neighbor commitments are becoming a common expectation for data center development. Such commitments must be credibly aligned with environmental realities, current energy markets, and deployment timelines in a way that benefits communities and allows for data center expansion. Mutually beneficial development is possible if done transparently, with realistic progress milestones and metrics and good stewardship.

How companies navigate this feasibility gap has the potential to shape not only public perception, but also the overall pace and geographical footprint of data center expansion in the coming years.

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Zach Allen is a partner, Elyse Sparks is an associate, and Wendy Kearns is a partner in the technology group in the Seattle office of DWT. For more insights, reach out to Zach, Elyse, Wendy, or another member of our technology team and sign up for our alerts.