Kevin O'Leary, Fox News face defamation lawsuit over China claims

Kevin O'Leary and Fox News have been sued for defamation after the Shark Tank investor accused opponents of his proposed Utah data centre project of being backed by the Chinese Communist Party.

Business Insider reported the lawsuit, filed Wednesday in a federal court in Utah, was brought by Alliance for a Better Utah, Elevate Strategies, and two of the organisations' founders. They allege O'Leary falsely portrayed them as foreign agents during multiple media appearances between May 11 and June 3.

Plaintiffs allege false accusations caused harm

According to the complaint, O'Leary repeatedly claimed that critics of the proposed Stratos Project were linked to the Chinese government.

During one appearance on Fox News, O'Leary allegedly described Elevate Strategies co-founders Gabrielle "Gabi" Finlayson and Jackie Morgan as "proxies for the Chinese Government."

The plaintiffs argue the allegations were false and caused severe reputational and financial damage, including lost clients and business opportunities. They are seeking compensatory and punitive damages, although no specific amount has been disclosed.

O'Leary later said he had no evidence

On June 25, O'Leary posted a statement on Instagram clarifying his earlier remarks.

"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.

Despite that clarification, the plaintiffs argue the earlier statements had already caused lasting harm.

Fox News vows to fight lawsuit

A Fox News Media spokesperson said the network would "vigorously defend" against the lawsuit.

The company also said it corrected the record on every programme where O'Leary's comments aired and noted that those corrections had been widely publicised.

Meanwhile, O'Leary's attorney, Jeffrey Neiman, described the lawsuit as a "cash grab" and said his client may file counterclaims.

Neiman also argued that the plaintiffs had refused an invitation to discuss the Stratos Project and said the legal process would examine the facts surrounding the opposition campaign.

Stratos Project has faced local opposition

The dispute centres on the Stratos Project, a proposed hyperscale data centre campus in Utah's Box Elder County backed by O'Leary.

The development, initially approved for 40,000 acres, is expected to require up to nine gigawatts of electricity when fully operational.

Residents and advocacy groups have raised concerns about the project's impact on water resources, air quality, traffic, noise and the approval process.

In response to the controversy, Utah Governor Spencer Cox issued an executive order tightening regulations governing future data centre developments. Separately, Alliance for a Better Utah and several residents filed another lawsuit in June challenging the project's approval process.