Mark Cuban says communities are falling victim to 'contractual terrorism' in data center deals

Healthcare has lengthy used complex contracts that can obscure who pays for what. Mark Cuban says data center developers are using a akin playbook.

"A lot of communities have been really dumb alongside the deals they've negotiated for data centers," Cuban stated on an event of "The A16z Show" released on Wednesday. "They've fallen for the contractual extremism in a lot of cases."

Cuban, who co-founded Cost Plus Drugs, a business that sells generic medicines at a transparent markup, earlier coined the expression "contractual terrorism" while discussing healthcare.

On the A16z podcast, he stated enormous healthcare insurers and their subsidiaries use sprawling, opaque agreements to obscure expenses and create it difficult for employers to cognize anywhere their prosperity is going.

Cuban stated those contracts are "so big and so long" that insurers "get to be contractual terrorists" — a formulation he additionally applied to communities' data center deals.

His comments arrive as the data center surge has rotate into a hugely contentious issue in communities throughout the US.

Residents living near accommodation have reported incessant low-frequency hums, diesel smells, intrusive lights, building disruption, force on h2o and power supplies, and the defeat of trees and open land.

In Northern Virginia, the country's data center capital, local opposition has helped reshape elections, prompted lawsuits, and pushed residents to petition tighter noise and zoning rules.

A University of Massachusetts Amherst study of 1,000 Americans from September established that 65% opposed construction an AI data center in their local community, including 49% who stated they powerfully opposed it.

The shade data center backlash

The competition to build AI infrastructure has additionally produced far additional announcements than functioning facilities.

Aterio, which tracks projects through moon imagery, permits, and another records, counted 8,268 announced US accommodation as of October 20. But lone 2,126 were active, and 861 were under construction.

Thousands additional had fair been announced, leaving local governments to negotiate consequential long-term agreements for projects that may never progress beyond a media release.

That is a hazard Cuban has warned about.

In a sequence of X posts in September, he laid out a 10-point playbook for communities considering their archetypal data center, arguing that all commitment from a developer should arrive alongside a measurable limit, autonomous oversight, financial backing, and a remedy if it is broken.

Cuban's direction is to resolve those questions before building begins.

"Resolve it before granting the endorsement that spends the final of the town's leverage," Cuban wrote at the time.