Shark Tank star Kevin O'Leary's fight over a proposed mega data center in Utah has now spilled into federal court. Two political groups say his claims linking them to Chinese Communist Party influence did more than intensify an already bitter debate over artificial intelligence infrastructure — they also harmed reputations, livelihoods, and personal safety.
What happened?
According to Fortune, Utah-based organizations Alliance for a Better Utah and Elevate Strategies — along with Alliance for a Better Utah founder Joshua Kanter and Elevate Strategies founder Gabrielle Finlayson — have filed a defamation lawsuit against Kevin O'Leary and Fox News Network.
In the complaint, the plaintiffs say O'Leary wrongly portrayed them as connected to the Chinese Communist Party while promoting Stratos, his proposed large AI-focused data center development in Box Elder County.
According to the complaint, O'Leary made similar accusations in at least 10 media appearances between May 11 and June 3. In one interview, he said: "These two cells, it's the CPP [sic] at work here. There's no question about it."
Their filing describes the fallout as "devastating reputational harm, significant economic losses, severe emotional distress, and ongoing threats to their physical safety," and they are seeking damages to be determined at trial.
Fox said it "publicly corrected the record on every program where on-air guest Kevin O'Leary's comments were made," Fortune reported. O'Leary later wrote on Instagram that he had "no evidence" that Alliance for a Better Utah — including founder Josh Kanter and former executive director Taylor Knuth — Elevate Strategies, or founder Gabrielle Finlayson were funded by China or the CCP.
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Why does it matter?
The lawsuit arrives as large AI data center proposals are facing growing resistance across the country, especially in communities expected to absorb the environmental and utility costs.
Fortune reported that Stratos could eventually support as much as nine gigawatts of AI computing power across tens of thousands of acres near the Great Salt Lake in Box Elder County. That scope has fueled local concern over water use, environmental harm, and disruption to the surrounding area.
Fortune also reported that a Gallup survey published in May found 70% of Americans oppose having an AI data center built in their area.
What's being done?
The legal battle is now one part of a broader effort to slow, scale back, or more closely scrutinize the project.
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Under pressure, O'Leary recently unveiled a scaled-down version of Stratos that, as Fortune reported, cuts the total footprint from 40,000 acres to 20,000, with 10,000 acres reserved for data centers and related infrastructure.
Opponents are also challenging the process that advanced the proposal. Alliance for a Better Utah has joined a separate lawsuit that contests the constitutionality of the Military Installation Development Authority, the state-created body that first approved the project.
Some Utah politicians who backed the development have already encountered voter backlash.
While projects like these can bring jobs and tax revenue, communities often want clear answers before construction begins.
Even though Fox said it issued corrections, the plaintiffs' lawyers argue those efforts "fail to address the harms that O'Leary and Fox News caused during their weekslong smear campaign."
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