Kevin O'Leary sued after accusing Utah AI data centre critics of acting as foreign agents

Kevin O'Leary sued after accusing Utah AI data centre critics of acting as foreign agents

Canadian businessman says he plans to 'vigorously defend' case in court, potentially with counterclaims

The founders of two organizations in Utah are suing Canadian businessman Kevin O'Leary and Fox News, claiming the entrepreneur falsely accused them of working as foreign agents after they criticized the AI data centre he's proposed for their state.

The lawsuit filed on Wednesday claims the Shark Tank and Dragons' Den star ran a weekslong "smear campaign" in at least 10 separate interviews with Fox about opposition to the project in Box Elder County this spring.

"Over and over, on Fox's programs and others, O'Leary called his fabricated accusations 'irrefutable fact.' But they were not. They were lies. O'Leary and Fox eventually admitted as much," read the claim filed in U.S. District Court.

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"The magnitude of the reputational harm and other damages Plaintiffs have suffered — and continue to suffer — is enormous. This is in large part due to the staggering breadth of O'Leary and Fox's massive global communications networks, each of which reaches many millions of viewers, listeners, and followers across the world each day."

O'Leary posted online in June conceding he had "no evidence" for the claims. In a statement to CBC News on Thursday, O'Leary's lawyer said his client will "vigorously defend" the lawsuit including, when appropriate, with counterclaims.

In a separate statement, Fox News Media said it would also fight the lawsuit.

Founders 'confused' by O'Leary's interviews

The legal filing is the latest development in a dispute that began in April after O'Leary announced plans for a new, 40,000-acre data centre campus — an area larger than the city of Vancouver.

In an interview with CBC News in May, the businessman said the project would move forward with transparency and ultimately bring hundreds of permanent jobs to the area, all while boosting computing capacity and productivity.

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Members of the public have criticized the project over transparency, accountability and fear the campus will worsen the effects of climate change in the area.

Joshua Kanter's progressive nonprofit, Alliance for a Better Utah, and Gabrielle Finlayson's political consulting firm, Elevate Strategies, posted their concerns about the data centres on social media in May.

In interviews with various shows on Fox News network in May and June, O'Leary claimed the backlash to the data centre was part of a misinformation campaign China was funding in an effort to undermine AI development in the United States.

He claimed the organizations run by Kanter and Finlayson were acting as "proxies for the Chinese government."

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In one interview, O'Leary claimed he had shared 90 pages of evidence with federal law enforcement and raised his concerns directly with contacts at the White House.

He later clarified in the same interview: "I'm not suggesting it. It's an irrefutable fact … No, I'm not inferring it. I'm saying that is exactly what's happening."

The lawsuit said Kanter and Finlayson "were confused" by O'Leary's focus on them because "they played virtually no role in any organized opposition to the project."

"The Alliance and Elevate had simply posted about the project a couple of times on their social media platforms," read the claim.

On June 25, O'Leary posted on social media saying he had "no evidence" Kanter, Finlayson or their organizations were foreign agents. The lawyer for the founders said the post came after a legal demand to retract what he'd said.

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"Over and over again, O'Leary made clear that he was not voicing his personal opinion," read the lawsuit filed Wednesday.

"Despite his declaration that his claims were 'irrefutable,' O'Leary never presented any evidence that supports the contention that Plaintiffs were funded by, acting at the behest of, or otherwise agents of, the Chinese government or the CCP."

O'Leary's lawyer Jeffrey Neiman said in Thursday's statement that he tried, without success, to discuss the issue with the founders out of court.

"He clarified his remarks weeks ago and invited these organizations and individuals to sit down with him and discuss the project directly. They declined," Neiman wrote in the statement.

"Offered dialogue, they chose a courtroom — because this was never about reputation. It is a cash grab, and the second one: within days of the statements at issue, the plaintiffs were fundraising off of them."

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Neiman also said organizations that fund and co-ordinate opposition to American AI infrastructure are a matter of "serious national concern."

"The plaintiffs have put their operators, funding, and co-ordination squarely at issue," he said. "We welcome that, and we look forward to discovery and uncovering the facts related to the misinformation campaign against the data center in Utah."

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The lawsuit also names Fox News Corporation, claiming the network "was instrumental in O'Leary's defamatory smear campaign" by repeatedly putting him on the air without verifying or challenging his claims.

In its statement, Fox News Media said it had already issued on-air corrections and plans to fight the claim like O'Leary.

"FOX News Media publicly corrected the record on every program where on-air guest Kevin O'Leary's comments were made, all of which was extensively publicized," the statement said.

Rhianna Schmunk is a senior writer covering domestic and international affairs at CBC News. Her work over the past decade has taken her across North America, from the Canadian Rockies to Washington, D.C. She routinely covers the Canadian courts, with a focus on precedent-setting civil cases. You can send story tips to rhianna.schmunk@cbc.ca.