Kevin O’Leary’s massive Utah data center proposal triggered a bipartisan local revolt over its speed, scale and lack of public input, turning AI infrastructure into a potent political issue. (Source: Image by RR)

Kevin O’Leary Becomes Face of Utah’s Data Center Backlash

A proposed AI data center in rural Utah has become one of the country’s most visible examples of growing resistance to the infrastructure required by the artificial intelligence boom. Celebrity investor Kevin O’Leary promoted the Stratos project in Box Elder County as potentially the world’s largest data center, with a development area spanning roughly 40,000 acres and plans for as much as 9 gigawatts of on-site natural-gas generation—more than twice Utah’s average electricity demand. But local residents and even county officials say the project advanced largely outside public view before commissioners were asked to make a consequential and effectively irreversible decision about its future.

The project’s speed became central to the controversy. Developers and Utah’s Military Installation Development Authority had been working on the proposal before Box Elder County commissioners received a formal briefing on March 25, leaving them roughly 40 days before their May 4 vote. Approval transferred land-use authority inside the project area from the county to MIDA, while proposed financial terms included no property taxes on servers and other equipment and returning 80 percent of taxes collected on buildings and land to the developer for infrastructure. Major questions, as noted in an article in theverge.com, involving water, power-generation technology, military involvement and an anchor tenant remained unresolved as officials pressed for approval.

Public opposition exploded as residents learned more about the proposal. More than 1,000 people attended the final county meeting, where commissioners declined to allow public comment and eventually left the stage amid shouting before approving the project from a back room. Residents subsequently organized the Box Elder Accountability Referendum, attracting thousands of volunteers across an unusually broad political coalition. Concerns ranged from water use and air pollution to tax subsidies and the lack of public involvement. O’Leary intensified the backlash by publicly suggesting that some opponents were connected to Chinese interests, claims he later said he had no evidence to support.

The political consequences have already been significant. Two Box Elder commissioners who supported the project lost Republican primaries, as did Utah Senate President and MIDA chairman Stuart Adams, while Gov. Spencer Cox has called the approval process flawed and proposed changes to MIDA. The project itself remains stalled: no anchor tenant has been publicly announced, no allotted land had been sold by late September and several governing agreements remained unsigned. O’Leary says development is still moving forward, with an initial phase reduced to one gigawatt, but the episode demonstrates an emerging constraint on America’s AI buildout: communities increasingly expect a voice in deciding whether the massive industrial infrastructure behind artificial intelligence gets built in their backyards.

read more at theverge.com