Eminent Domain Is Being Used to Build Data Centers

A utility company can legally take your land to run power lines to a private AI data center — and courts have generally been fine with it. That's genuinely staggering when you sit with it, because the legal mechanism in play was designed for railroads and highways, not server farms running large language models.

This is what's happening right now in places like Georgia and Pennsylvania. According to The Conversation and UPI, power companies across both states have looked to eminent domain to acquire easements for transmission lines — and when landowners refuse to sell, the utilities can initiate condemnation proceedings. The data centers don't seize land directly. The power companies do it for them.

That distinction is doing a lot of legal heavy lifting right now.

The Mechanism (And Why It Matters)

Eminent domain — the government's power to take private property for public use, with compensation — has always been a pressure valve in American infrastructure law. It's how the interstate highway system got built. It's why you have power lines running through farmland. The Fifth Amendment requires "just compensation," but it doesn't require consent.

The catch is the phrase public use. For most of American history, that meant things with obvious public access: roads, bridges, public utilities. Then came Kelo v. City of New London (2005), where the Supreme Court held that economic development — including transferring property to private developers — could qualify as public use. The backlash was enormous. Most states passed laws tightening their own eminent domain standards. Which is why, as Fortune notes, private landowners may actually have more success challenging condemnation actions under their state constitutions than in federal court.

But here's the wrinkle the data center story exploits: courts have long permitted utilities — regulated power companies — to exercise eminent domain for transmission infrastructure. That permission exists because electricity grids are textbook public goods. You can't run a modern economy without them, and the whole system depends on utilities being able to site lines without any single landowner being able to hold the grid hostage.

The argument being made now, implicitly, is that AI infrastructure is just the latest chapter in that same story. Data centers need power. Power needs transmission lines. Transmission lines need land. Therefore: eminent domain.

Georgia and the Ground-Level Reality

In Georgia, the situation is concrete and contested. According to Newsweek, some residents say they are being forced to sell their property for a Georgia Power transmission project that the utility says will primarily serve data centers. That word — primarily — is where the legal and ethical fault lines run.

A transmission line that serves a data center also, technically, serves the grid. Power flows both ways. Capacity built for one industrial customer adds resilience for others. This is the strongest version of the utility argument, and it's not nothing: the grid genuinely needs upgrades, and data center demand is one of the few forces actually funding those upgrades at scale.

Dagens.com describes "massive outrage among local property owners" as these projects advance — and the outrage isn't hard to understand. You own land your family may have held for generations. A utility company shows up, says it needs a corridor for power lines, and tells you that if you won't sell, the state will simply take it. The compensation is "just" by legal standards, but you didn't choose to sell. You didn't choose to have a data center as a neighbor. And the entity that ultimately benefits — the hyperscaler or AI company leasing rack space — never had to make the ask directly.

Where the Legal Lines Are Blurry

The Hacker News thread on this story (news.ycombinator.com) captures the genuine tension well. Some commenters push back on the framing that utilities are "selling out their privileges" as subcontractors for data centers — noting that transmission lines are, in the commenter's words, "pretty harmless when considering things that could be built instead." The argument: if the grid needs the line anyway, and a data center happens to be the anchor tenant that makes the economics work, is this categorically different from a railroad that primarily serves a mine?

But here's where I land: the railroad-mine analogy only holds if the transmission infrastructure retains genuine public utility independent of the data center. If the line gets built specifically because of one hyperscaler's demand, and its routing reflects that customer's needs rather than grid optimization, calling it a public use starts to feel like legal fiction. The question isn't whether power lines are generally useful. It's whether this specific condemnation would happen without a private beneficiary driving it.

That distinction is exactly what state courts will be asked to draw — and Fortune's reporting suggests the answer will vary significantly by state, depending on how tightly post-Kelo reforms constrained eminent domain authority in each jurisdiction.

The Policy Gap Nobody Has Filled

What's striking about this moment is the absence of a clear framework. The AI infrastructure build-out is happening faster than legislatures can respond. Utility commissions that were designed to oversee electricity distribution are now de facto arbiters of where the AI economy gets to put its physical footprint. Nobody voted on that. Nobody really designed it.

The question of what "public use" means when the use is AI infrastructure isn't abstract anymore — it's playing out in real proceedings, with real families receiving real notices that their land is subject to condemnation. The legal machinery exists. The policy guardrails don't.

What happens to the "public use" doctrine when the public's stake in the infrastructure is increasingly indirect — one or two steps removed from the private entity that actually profits? That's not a rhetorical question. It's the one state courts and legislatures are going to be forced to answer, whether they're ready or not.

— Tyler Nakamura, Consumer Tech & Gadgets Correspondent, BuzzRAG