As the United States adds more than 1,500 data centers in development to the more than 3,000 already operating, power companies are turning to eminent domain to acquire private land for new transmission lines, sparking legal battles over whether providing electricity to AI facilities counts as a public use.

When landowners refuse to sell easements for transmission corridors, utilities are invoking eminent domain — the government’s constitutional power to take private property for “public use” in exchange for just compensation. The question now reaching state courts is whether a line built to serve a private data center meets that standard, and the early rulings have mixed results.

“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 cited by Aaron Walayat, an assistant professor of law at the University of Dayton, in an analysis published by United Press International. Demand for electricity is climbing; data centers consumed more than 4% of all U.S. power in 2024, and the figure is expected to rise as more are built.

The supreme courts of South Dakota and Vermont have affirmed seizures for transmission lines serving data centers, Walayat writes, finding that providing at least some energy and improved grid reliability to in-state customers satisfies the public use requirement. But the Mississippi Supreme Court in 1984 blocked a condemnation where the line crossed into Louisiana without benefiting any Mississippi residents.

“As data centers increase energy demand and stress current infrastructure, seizing land to improve power grid reliability will likely qualify as public use, especially if the intention is to secure reliability for in-state customers,” Walayat writes. Still, he adds, arguments over whether new lines actually serve in-state customers “may give landowners grounds for a challenge.”

The disputes are unfolding against a long-standing debate about the limits of taking private property for public use. The U.S. Supreme Court’s 2005 decision in Kelo v. City of New London, which allowed a Connecticut city to seize homes for private development around a Pfizer facility, drew the public backlash that followed, and 45 states enacted eminent domain reform laws. The supreme courts of Michigan, Ohio and Oklahoma have since prohibited taking private property to hand it to another private party purely for economic development. Utilities have historically received wide latitude.

Polling shows that 7 in 10 Americans oppose the construction of AI data centers in their communities, citing higher utility bills, pollution, noise, and the loss of green space. President Trump has promoted AI advancement as critical to economic and national security.

The outcome of the eminent domain cases will determine how far utilities can go to feed the AI industry’s electricity appetite and whose property they can take in the process.

Courts weigh whether serving private data centers qualifies as public use

  • Power companies are using eminent domain to acquire private land for transmission lines to serve the growing number of AI data centers, triggering legal disputes over whether the takings satisfy the constitutional requirement of “public use.”
  • More than 3,000 data centers are already operating in the United States, with roughly 1,500 more in development, according to a Pew Research Center analysis, and the facilities accounted for more than 4% of the nation’s total electricity consumption in 2024.
  • Seven in 10 Americans oppose the construction of AI data centers in their communities, polling shows, citing higher utility bills, pollution, noise, and the loss of green space.
  • Legal scholar Aaron Walayat of the University of Dayton says court decisions have been mixed: taking land to improve grid reliability likely qualifies as public use if it benefits in-state customers, but landowners can challenge lines that do not provide local benefit.