Utah Data Center Fight Draws Spy Claims as States Weigh Bans

Utah political consultant Gabi Finlayson was driving through a canyon last week when her phone lit up with urgent messages. Colleagues and friends were reaching out after billionaire investor Kevin O'Leary appeared on Fox News and accused her firm, Elevate Strategies, along with the nonprofit Alliance for a Better Utah, of operating as cells tied to the Chinese Communist Party. O'Leary, who is pushing a 40,000-acre data center campus in the state through his Stratos project, claimed his team had traced IP addresses linking the groups to Beijing. Finlayson and her colleague Jackie Morgan learned of the allegation only after emerging from the canyon and checking their messages. Finlayson described the claim as an outright fabrication driven by their public criticism of the project's potential strain on local resources. Elizabeth Hutchings of Alliance for a Better Utah told Fox News she would likely earn far more if she were actually on a foreign payroll. The groups have organized against the development over worries about electricity demand, water use, and impacts on rural communities.

O'Leary's remarks come amid growing resistance to large-scale data centers nationwide. At least 11 states have considered bills to restrict or ban new facilities this year, and Maine's governor recently vetoed what would have been the first statewide prohibition. In Washington, Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have introduced legislation to pause all new construction. Supporters of these measures point to the facilities' heavy energy consumption and the risk of higher utility bills for residents. More than 300 related bills have appeared in over 30 state legislatures in 2026 alone, with several states creating special rate classes for large power users.

Data center developers and their allies argue the projects face extensive oversight under federal environmental laws and state rules on efficiency and grid upgrades. They note that technology companies have signed pledges, including one announced by President Trump in March, promising not to pass added electricity costs onto households. Industry backers also contend that blocking construction would slow economic growth and innovation in artificial intelligence and cloud computing. Yet local campaigns have already delayed or halted projects valued at more than 160 billion dollars since 2024, often citing concrete effects on power grids and property values rather than abstract national security threats.

Finlayson and Morgan say O'Leary's espionage charge represents an attempt to shift attention from those local concerns. They have continued their advocacy work despite the public attacks, noting that the accusation surfaced shortly after they spoke against the Stratos proposal. Similar tactics have surfaced in other states where residents question rapid expansion of data infrastructure, though few have escalated to direct foreign-agent allegations on national television. The episode underscores how debates over energy infrastructure are increasingly framed through partisan or geopolitical lenses, even as regulators and lawmakers weigh competing demands on electricity supplies and land use.