The fight over data-center expansion is no longer just about servers, noise, or local politics. It is increasingly about land. Power companies are using eminent domain to seize property needed for transmission lines that connect high-demand AI and data-center infrastructure, even as polling shows 70% of Americans oppose construction of AI data centers in their communities.

Why that matters is simple. Data centers are energy-hungry, and the buildout is accelerating. There are more than 3,000 data centers in the U.S. and another 1,500 in development, according to a Pew Research Center analysis. In 2024, data centers accounted for more than 4% of the nation’s total electricity use. Meeting the next wave of demand requires more transmission lines, and those lines often have to cross private land owned by individuals who may refuse to sell or grant easements.

That refusal is where eminent domain enters. Eminent domain is the government’s inherent power to seize private property without a landowner’s consent, as long as it qualifies as “public use” and the owner receives “just compensation” under the Fifth Amendment’s takings clause. In practice, power companies often begin by approaching landowners to purchase easements for transmission lines. When that fails, the government can move to force a sale through condemnation proceedings. Most of these actions are state and local rather than federal, and states can delegate authority to private entities or “common carriers,” including utilities such as power and water companies, but the exact rules vary by state.

This is where the legal architecture gets decisive. While the federal government can initiate eminent domain actions, it is typically state and local governments that carry them out, and states also differ on whether and how utilities qualify to use the power. Some state courts impose constraints that make “public use” harder to stretch. The Texas Supreme Court, for example, has held that a project must “serve the public” and “cannot be built only for the builder’s exclusive use” for it to qualify as a common carrier.

But the broadest frame still traces back to a single Supreme Court decision. In 2005’s Kelo v. City of New London, the Supreme Court interpreted “public use” permissively, holding that economic development could count. That allowed New London, Connecticut to seize homes for private development around a Pfizer facility. The redevelopment never happened, and Pfizer eventually left New London. The fallout was political and legal backlash, and lawmakers responded by tightening the rules at the state level. In total, 45 states enacted eminent domain reform laws after Kelo.

Even with reforms, challenges do not land uniformly. Some state supreme courts interpret their own state constitutions more restrictively than the federal baseline. Courts in Michigan, Ohio, and Oklahoma have prohibited seizing private property to transfer it to another private party purely for economic development. That means landowners may have a better shot arguing under state constitutions than they would in federal court. Still, courts often continue to permit eminent domain for utilities, especially when the project is framed as supporting the public through service reliability, not simply enabling a private commercial site.

So what does “public use” look like for transmission lines tied to data centers? The results can turn on who benefits and how directly. In South Dakota and Vermont, supreme courts affirmed seizures by power companies, finding that providing at least some energy and improved power grid reliability to in-state customers were valid public uses. The logic is straightforward: if the grid upgrade improves reliability for the jurisdiction’s customers, then it looks more like a public benefit and less like a private convenience.

However, courts can be less receptive when benefits are not clearly tied to local residents. The Mississippi Supreme Court rejected a power company’s condemnation action in 1984 because the transmission line would have run from Mississippi into Louisiana without benefiting any Mississippi customers. In other words, the “public use” argument weakens when the project’s advantages do not map to the relevant state’s population.

Executives looking at data-center expansion should treat these cases as more than legal footnotes. The underlying driver is demand. AI data centers hold the servers that process words, images, and lines of code for large language models such as ChatGPT, and they also require high amounts of water and electricity. On the power side, expansion means not only new generation or contracting, but physically building transmission capacity that can stress or reshape existing electrical grids. If eminent domain battles slow down right-of-way acquisition for transmission lines, the ripple effects show up as timelines slipping, permitting becoming contentious, and costs rising across the chain.

There is also a governance angle. If utilities are pushed to rely on condemnation after easement negotiations fail, they are effectively inviting a protracted legal process into infrastructure planning. That can create uncertainty for data-center developers and the broader ecosystem that depends on power delivery. The strategic question for boards and leadership teams is whether they are building projects that assume smooth land access, or whether they are prepared for the possibility that “public use” arguments could evolve as courts compare grid reliability benefits, customer impacts, and state-specific constitutional standards.

The big picture is that a Supreme Court-shaped concept of “public use” still exists, but state reforms and state constitutional interpretations have changed how it is applied. For data-center and power stakeholders, the operational risk is not just energy demand. It is the legal friction that can follow when transmission lines need private land and the definition of “public benefit” is contested in court.