Eminent Domain Used to Power Data Center Growth
20 Jul 2026
Power companies across the U.S. are increasingly turning to eminent domain to build the transmission infrastructure needed to keep pace with data center growth — a trend that's already displacing landowners in states like Georgia and Pennsylvania and setting up a collision between AI infrastructure buildout and public opinion.
The scale of the buildout
The numbers behind this trend are stark. There are more than 3,000 data centers currently operating in the U.S., with another 1,500 in development. That growth isn't cheap on the grid: in 2024, data centers accounted for more than 4% of the nation's total electricity use.
To keep up, power companies say they need to build more transmission lines — and in some cases, they're using eminent domain to secure the land for it. That's putting private landowners in the path of infrastructure projects tied to private data center development, not traditional public utilities.
Public opposition is high
Despite the federal push for AI expansion — President Donald Trump has called AI advancement crucial to economic and national security — the public isn't necessarily on board with the infrastructure that comes with it. 7 in 10 Americans oppose the construction of AI data centers in their communities, according to the report. That opposition sets up a potential flashpoint as more transmission projects move forward using eminent domain powers.
Legal backdrop: Kelo and its aftermath
The legal foundation for eminent domain disputes traces back two decades. The U.S. Supreme Court's Kelo v. City of New London decision, issued in 2005, expanded the scope of eminent domain to include economic development projects. In response, 45 states enacted eminent domain reform laws to limit or clarify how the power could be used going forward.
That reform history matters now: it's unclear from current reporting what specific legal mechanism or precedent power companies are citing to justify using eminent domain for data center-related transmission lines today, or how many cases have actually been filed. It's also unclear how affected landowners are being compensated or what legal recourse they have — details that will likely surface as more of these disputes play out.
Why founders should care
For early-stage founders building in or around AI infrastructure, this trend carries several probabilistic signals worth tracking:
- Sustained demand, but rising friction. The sheer number of data centers in operation and development suggests demand for AI infrastructure-adjacent products and services is likely to remain strong in the near term — but the 70% opposition rate suggests founders should expect increasing community and regulatory pushback as siting disputes multiply.
- Grid and energy opportunities may be opening up. As power companies expand transmission infrastructure to meet data center demand, there's a reasonable chance this creates openings for startups in grid technology, energy storage, or transmission efficiency — areas that could see growing customer demand if the buildout continues at its current pace.
- Efficiency plays could gain traction. Given that data centers already account for over 4% of U.S. electricity use, founders offering energy-efficient computing or alternative power solutions may find a receptive market as operators look to reduce strain on the grid and blunt public criticism.
- Legal and reputational exposure is a real risk. Startups involved in siting, powering, or partnering with data center operators should be aware that eminent domain disputes could carry legal and reputational risk, particularly in states where landowner opposition is organized and vocal.
What's still unclear
Several open questions remain that founders and operators in this space should watch for as the story develops: which specific power companies are involved, how much land has been affected so far, and whether the 70% opposition figure reflects sentiment specifically toward eminent domain-driven projects or AI data centers more broadly. As those details emerge, they'll likely shape how quickly regulatory or legislative responses follow — and how much runway remains for infrastructure providers operating in this space.