Analysis
Alliance for a Better Utah, Elevate Strategies and several individuals sued Kevin O'Leary and Fox News for defamation, alleging O'Leary falsely claimed in at least 10 separate Fox interviews that opposition to his proposed data center in Box Elder County, Utah was linked to Chinese Communist Party funding, according to Fortune and The Hill reporting published July 17.
O'Leary has since publicly conceded on social media that he had no evidence for the claims, and Fox News says it corrected the record on every program where the comments aired. The lawsuit nonetheless alleges Fox News was instrumental in what plaintiffs call a weekslong smear campaign, arguing the network repeatedly put O'Leary on air without independently verifying or challenging his claims about the opposition group's funding sources.
The case lands amid a broader, increasingly visible wave of local backlash against AI data-center construction: The Register reported activists threw acid at a Microsoft data-center project in Amsterdam this same week, and CNBC separately reported that Elon Musk's Memphis AI data-center project, Colossus, has become an epicenter of community backlash over environmental and infrastructure concerns -- together painting 2026 as the year local opposition to AI infrastructure buildout became organized, litigious and occasionally violent rather than a fringe concern.
For AI infrastructure and data-center investors, the case underscores that community opposition is a real, underweighted project-delay and reputational risk in underwriting data-center capex -- and that responding to legitimate local concerns by framing them as foreign-influenced, rather than engaging directly, can create entirely new legal liability on top of the original permitting and construction risk.
The bear case: a single defamation suit doesn't resolve the underlying question of whether Box Elder County's specific opposition had any foreign funding ties, and O'Leary's public concession of no evidence doesn't necessarily determine legal liability under defamation standards, which require proving actual malice or reckless disregard for the truth. What to watch next: how the lawsuit proceeds through discovery, and whether other data-center developers facing local opposition adjust how they publicly characterize their critics in response.
