Utah Data Center Fight Draws Spy Claims as States Weigh Bans

Residents in rural Utah are contesting a proposed 40,000-acre data center campus that would rank among the largest in the country, citing risks to water supplies and air quality in a state already under drought emergency. The project, backed by investor Kevin O’Leary and approved by Box Elder County and the Utah Military Installation Development Authority, has drawn hundreds of protesters and thousands of formal objections to its water rights filings.

O’Leary appeared on Fox News and Fox Business in May 2026 and stated that his team traced IP addresses to two Utah groups—Elevate Strategies and Alliance for a Better Utah—linked to the Chinese Communist Party. Political consultant Gabi Finlayson and colleague Jackie Morgan, who run Elevate Strategies and have worked on Democratic campaigns, rejected the claim as false and tied to their public opposition. Elizabeth Huntchings of Alliance for a Better Utah likewise denied any foreign payment. O’Leary said further proof would follow but has not released it.

The Utah episode sits inside a wider pattern. At least eleven states introduced bills this year to restrict large data centers. Maine’s governor vetoed a statewide ban. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez proposed a national freeze. More than 300 data-center bills appeared in over thirty state legislatures in 2026, and local opposition has already delayed or blocked projects valued above $160 billion since 2024.

Federal rules already apply: the Clean Air Act, National Environmental Policy Act, and Endangered Species Act. States have added measures such as Illinois community impact assessments and Oregon’s requirement that large users fund grid upgrades. In March 2026, seven technology companies signed the Ratepayer Protection Pledge, committing to build or buy their own power and to shield households from rate increases.

Supporters of the Utah project and similar facilities argue that the United States holds 54 percent of global hyperscale data centers and that further delays shift investment to China and elsewhere. A Trump executive order from 2025 directed faster federal permitting for data centers to maintain technological lead. Critics in Utah and other states point instead to projected emissions rises, noise, and land use, plus limited early public notice.

South Dakota rejected a moratorium and enacted a Data Center Bill of Rights that lets localities set their own rules while requiring developers to cover infrastructure costs. A Box Elder County group is now seeking a referendum on the Stratos project. Utah’s legislature agreed this week to study effects on the Great Salt Lake. Governor Spencer Cox called the project rollout “not good.”

The core disagreement remains whether existing regulatory tools and local zoning suffice or whether broader prohibitions are required to manage electricity demand, water consumption, and community input.