O’Leary backs down, agrees to cut Stratos Project data center area in half

Celebrity business mogul Kevin O’Leary has agreed to scale back his controversial 40,000-acre data center project in Box Elder County.

The announcement came in response to mounting backlash over the development’s size and environmental impact.

“I have no choice,” the Canadian investor told reporters at a black-tie event in Washington, D.C., hosted by the Washington AI Network.

O’Leary said he was eliminating acquisition of two of the three land parcels in his original campus plans, which will reduce the project area to around 20,000 acres from the original 40,000-acre plan.

The Stratos Project, a “hyperscale” data center development, is a joint development between Utah’s Military Installation Development Authority (MIDA) — which approved the deal with a series of resolutions in April — and O’Leary Digital Utah Development Co., with O’Leary of ABC-TV’s “Shark Tank” at the helm. It has been billed as one of the world’s largest AI data center developments and was approved to span multiple sites. O’Leary will market the project under the name “Wonder Valley.”

The reduction announced by O’Leary does not achieve the 75 percent project reduction demanded in a June 1 letter to O’Leary from Utah Senate President J. Stuart Adams. Adams asked O’Leary that the project be reduced to 10,000 acres in addition to “greater transparency, stronger conservation commitments and enhanced protections for Utah’s natural resources,” including protections for the Great Salt Lake.

Records show that none of the water in the Stratos Project area which will be diverted for use by the data center and its on-site power generating plant currently flows to the Great Salt Lake.   O’Leary said he felt that Adam’s letter was politically motivated because of the uproar over the project in Utah. Polls have found that Utahns oppose the data center project by a slim margin, primarily due to lack of public input as the approval process advanced.  Adams is facing a pair of GOP challengers for his Senate seat in next week’s primary. “I know he did it (sent the letter) for political reasons,” O’Leary told NBC News. “He has to address those issues, and so do I.” He said he sent a response to Adams detailing his revised project plans.

Adams, who is also the chair of the MIDA, the state entity that will partner with O’Leary Digital on the Stratos Project, responded to O’Leary’s compromise in a statement published on his official Utah Senate website. 

“O’Leary’s concessions in response to the demand letter I sent are a positive step forward,” Adams said. “The concerns raised by Utahns are valid, which is why I have pushed for meaningful changes to ensure those issues are addressed before any project can move forward.

“O’Leary’s concessions in response to the demand letter I sent are a positive step forward. The concerns raised by Utahns are valid, which is why I have pushed for meaningful changes to ensure those issues are addressed before any project can move forward.”

“It is important to highlight that this process is still in its earliest stages — no approvals or permits have been applied for, let alone issued. There must be written commitments in place, and the proposal must undergo a full permitting and environmental review process, just like any other development project in Utah.” 

Adams also referred to assurances concerning Great Salt Lake water made by O’Leary. Details of that commitment were unknown at press time.

“Protecting Utah’s water, especially the future of the Great Salt Lake, remains one of my highest priorities. As a result of the letter, the project now includes a commitment of water that did not previously exist for the Great Salt Lake,” Adam’s statement said. 

Adams also claimed additional victories from the O’Leary action.

“O’Leary also committed thousands of acres to be set aside for open space, wildlife protections and continued agricultural use under an agreement with the Utah Department of Natural Resources. Additional commitments include heat-capture technology and independent scientific and engineering reviews of environmental impacts, water use, infrastructure demands and long-term sustainability,” Adams added.

“The response to the demand letter I sent demonstrates that public engagement matters and that Utahns’ concerns are being heard. I will continue working to ensure those concerns lead to meaningful changes, stronger safeguards and greater accountability,” Adams concluded.