Kevin O'Leary's Utah AI Data Center Faces Backlash Over Environmental Impact and Scale

Kevin O’Leary, best known as “Mr. Wonderful” on Shark Tank, is expanding his portfolio beyond investing and entertainment into a new frontier: artificial intelligence infrastructure. While celebrities like Ashton Kutcher and Ben Affleck have made AI-related investments, O’Leary is taking a more hands-on approach with a massive data center project in northern Utah.

O’Leary’s AI Ambitions and the Stratos Data Center

O’Leary’s project, called Stratos, is set to become one of the largest data centers in the world. According to a developer involved in the project, Stratos would cover an area two-and-a-half times the size of Manhattan. The facility would be powered entirely by gas generators, a decision that has raised significant environmental concerns.

Dr. Daniel Mendoza, a professor at the University of Utah, estimated that the project could increase Utah’s net greenhouse gas emissions by up to 50%. Despite these concerns, the project has received backing from Utah’s Military Installation Development Authority, which has granted it substantial tax breaks.

Local Opposition and Protests

O’Leary’s plans have faced fierce opposition from local residents and environmental groups. On Monday, hundreds of protesters gathered at a meeting of the commissioners of Box Elder County, where the data center is planned to be located. However, they were not allowed to speak during the meeting. Instead, they were forced to hold signs in the back of the room as county commissioners approved a permit for the billion-dollar project.

In addition to the in-person protests, roughly 3,700 people have filed formal protests with the Utah Division of Water Rights, urging the agency to reject the data center’s permit. O’Leary responded to the backlash by claiming that many of the protesters were “professionals” bused in from out of state.

“I’m the only developer of data centers on earth that graduated from environmental studies. I'm pretty aware of what these concerns are. They are around air, water use, heat, noise pollution. So sustainability is at the heart of what we do in terms of all these proposals.”

O’Leary went on to claim that over 90% of the protesters are not Utah residents. He stated, “We think over 90% of the protesters are actually not people who live in Utah…I don’t think it’s going to work out for them.”

Environmental Concerns and Sustainability Claims

O’Leary has positioned himself as an environmentally conscious developer, despite the project’s reliance on gas generators. In a video posted to X, he emphasized his background in environmental studies and his commitment to sustainability in data center development. However, critics argue that the project’s scale and energy source undermine these claims.

Broader Context: Celebrities and AI Investments

O’Leary is not the only celebrity to venture into AI. Ashton Kutcher’s venture capital firm, Sound Ventures, invested $30 million in OpenAI, an investment now valued at over $1 billion. Meanwhile, Ben Affleck’s AI post-production company, InterPositive, was acquired by Netflix for approximately $600 million. Other celebrities, like Ryan Reynolds, have participated in AI-related advertising campaigns, such as his 2024 OpenAI/Mint Mobile TV spot.

However, O’Leary’s project stands out for its scale and direct involvement in AI infrastructure. By focusing on hyperscale computing, he is taking a more substantial step into the AI ecosystem compared to his peers.

What’s Next for the Stratos Data Center?

The future of the Stratos data center remains uncertain as environmental groups and local residents continue to challenge its permits. The Utah Division of Water Rights will review the protests and decide whether to uphold or reject the project’s permit. Meanwhile, O’Leary remains undeterred, asserting that the project will proceed as planned.