Fox News and “Shark Tank” investor Kevin O’Leary have been sued in federal court over allegations that O’Leary falsely accused two Utah nonprofit organizations and their leaders of working on behalf of the Chinese Communist Party to oppose his proposed AI data center project.
The defamation lawsuit, filed Wednesday in U.S. District Court in Utah, was brought by Alliance for a Better Utah, Elevate Strategies, and their founders, Joshua Kanter and Gabrielle Finlayson. The plaintiffs allege O’Leary repeated the accusations during at least 10 media appearances between May and June, including multiple segments on Fox News, causing significant reputational and financial harm.
Dispute stems from Utah data center project
The controversy centers on O’Leary’s proposed Stratos Project, a massive AI-focused data center campus planned for Box Elder County, Utah.
The project has drawn opposition from local residents and advocacy groups concerned about its potential impact on water resources, electricity demand, air quality, and the approval process. According to the lawsuit, O’Leary responded by publicly claiming that several of the project’s critics were acting as “proxies” or agents of the Chinese Communist Party.
The plaintiffs contend those accusations were false and unsupported.
O’Leary later retracted the claims
On June 25, O’Leary publicly walked back his allegations.
“Recently I appeared on various news programs and would like to clarify that I have no evidence that Alliance for a Better Utah, Elevate Strategies, Gabrielle Finlayson, Taylor Knuth or Josh Kanter are funded by China or the Chinese Communist Party,” he wrote in a social media statement.
The lawsuit argues that the retraction came only after the accusations had already spread widely and damaged the plaintiffs’ reputations.
The plaintiffs say they lost clients, business opportunities, and suffered online harassment after O’Leary’s comments were broadcast nationally.
Fox News says it corrected the record
Fox News said it corrected O’Leary’s statements on every program where the allegations aired.
The network also issued on-air acknowledgments that neither it nor O’Leary had evidence the organizations or their leaders were funded by, directed by or coordinating with the Chinese Communist Party.
In a statement responding to the lawsuit, Fox News said it “publicly corrected the record on every program where on-air guest Kevin O’Leary’s comments were made” and vowed to “vigorously defend” against the suit.
O’Leary calls lawsuit a ‘cash grab’
O’Leary’s attorney dismissed the case as a “cash grab” and indicated his client intends to fight the allegations.
The attorney also suggested O’Leary could pursue counterclaims during discovery, arguing the litigation will provide an opportunity to examine the plaintiffs’ funding and activities related to opposition to the data center project.
The lawsuit seeks compensatory and punitive damages, though it does not specify a dollar amount.
The case adds another high-profile defamation challenge involving Fox News, though unlike previous litigation, the network argues it promptly corrected the disputed statements after O’Leary acknowledged he had no evidence to support his claims.
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