- Kevin O’Leary’s Utah data center proposal spawned a wave of concerns, mostly focused on water use and air quality
- The “Shark Tank” star unveiled a similar, though slightly smaller, development in Alberta, Canada, in 2024.
- The Canadian project has faced similar pushback and is already two years behind schedule.
Canadian businessman and TV celebrity Kevin O’Leary’s plans for a massive data center complex in northern Utah touched off a firestorm of controversy when news of the project surfaced late last month.
Turns out O’Leary is even further down the road on another massive data center project in Alberta, Canada, and it’s one that has run into similar blowback from residents of the western Canadian province. While the project was unveiled in 2024, it is already well behind benchmarks promised by O’Leary’s development team.
A recent report from the University of Utah’s Kem C. Gardner Policy Institute notes data center construction efforts are booming across the U.S., driven primarily by artificial intelligence development and cloud computing needs. Data center buildouts are getting bigger and more powerful, according to the report, with average capacity per facility more than quadrupling over the past decade. Across the U.S., some 700 hyperscale and co-location data centers are under construction, adding to the 3,000 centers already in operation.
Utah currently plays host to 48 operational data centers that draw 920 megawatts of power with an additional 2,600 megawatts now under construction and set to more than triple the state’s overall data center output, according to the Gardner analysis.
O’Leary’s plans call for the phased development of data processing facilities that when completely built out would consume 9 gigawatts of energy, a level that far exceeds the peak usage of the entire state of Utah and would become the largest data center of its kind in the world, according to the developers.
Concerns surrounding the proposal, which has so far earned unanimous approval from an obscure state agency known as the Military Installation Development Authority as well as the Box Elder County Commission, are myriad. It’s worth noting that neither public entity allowed public comment during their meetings to consider proposals aimed at laying the groundwork for O’Leary’s project.
The main points of contention, however, concern water use and environmental impacts from the data center and its on-site, mega-scale power generation in a state that finds itself in the midst of severe drought conditions and air quality challenges that stretch back for decades.
What does the data center project in Canada look like?
O’Leary’s pitch to Canadian government officials and residents mirrors in many ways the one delivered to Utahns in that the investment will purportedly lead to thousands of new jobs, spawn follow-on development and bring new economic vitality to the sparsely populated region. He also similarly downplayed water use concerns for both projects, arguing that new technology has greatly reduced the water-hungry processes used to keep hot-running digital processors cooled down.
The Alberta proposal, which O’Leary is calling Wonder Valley and is aiming for a full buildout of 7.5 megawatts, matches up with the so-called Stratos project in Utah when it comes to how developers say they plan to solve its gargantuan power needs. While the Utah version aims to tap into a nearby regional natural gas pipeline to run power generating facilities, O’Leary’s Alberta site sits atop one of the world’s largest natural gas reserves.
A report from the University of Calgary notes that Alberta managed to reduce its emissions by 27 megatons between 2005 and 2023, thanks in part to a shift away from coal-powered electricity. But researchers suggest the province’s plan to add 6,500 megawatts of data center loads to the grid could erase all that progress.
“The Wonder Valley project, for example, could produce between 25.7 to 30.5 megatons of emissions per year, if built as planned,” the report reads. “The amounts could vary depending on the turbines, type of fuel, and use of carbon capture.”
That level of pollutants would, according to researchers, set Alberta’s overall emissions output back to levels similar to that of 20 years ago.
CBC News reported last month that Alberta’s government will not conduct an environmental impact assessment for O’Leary’s data center. According to the Ministry of Environment and Protected Areas, the project was reviewed by an independent approvals officer who deemed it exempt from the assessment due to its proposed use of standard power and water systems.
Permits, however, are still required before construction can begin.
“Wonder Valley must provide detailed technical assessments on impacts to air, land and water, and show the project can be built and operated safely,” the minister’s office said in a statement to the Canadian news outlet. “No permit is granted unless those requirements are satisfied.”
O’Leary told CBC News he is “bullish” on seeing the project through and he is awaiting that permitting to move forward.
“The minute we get the permit, that triggers a whole bunch of other activities in terms of how we finance it, when we start engineering, design, everything else,” he said.
The water question
In Utah, O’Leary’s data center plans call for accessing water via the transfer of privately held agricultural water rights. One such transfer application, submitted on March 25 by Bar H Ranch, was withdrawn last week, a day after the Box Elder County Commission voted to allow the data center project to proceed. The application to the Utah Division of Water Rights drew some 3,800 formal protest filings before it was withdrawn, according to KSL.com. The applicants, however, said they intend to resubmit the transfer request.
“In light of the county’s action on Monday, we are withdrawing the current change application at this time,” wrote Bar H consultant Logan Riley in an email to the Utah Division of Water Rights. “Bar H Ranch intends to resubmit in a timely manner with additional supporting information and to further demonstrate the feasibility of the application.”
In its initial application, Bar H was asking for the transfer of 1,900 acre-feet of water rights so it could be used for the data center project instead of its current use for irrigation. Most of that water volume, according to the applicants, would be used for the project’s power generation with a smaller portion planned to go toward data center cooling, according to the application.
While the developer has argued that transferring existing agricultural water rights to industrial use represents a zero net gain in water use, numerous formal protests have called out that assertion, arguing that future water volume use by the data center developers could very well exceed what is currently being used in that land area, which includes 40,000 acres of private property and 1,200 acres of military and state-owned land.
Impact on the Great Salt Lake
“In the application, the applicant states that of the 1,900 acre feet applied for, the proposed change does not increase the quantity of water historically ‘diverted’,” wrote Friends of the Great Salt Lake in its protest of the Box Elder County water rights transfer. “However, this fails to address what the actual consumption will be and whether there will be an increase in the amount consumed beyond what is presently being used. Given that the existing usage is an agricultural operation on the very shore of Great Salt Lake, the return flow to the Lake from that operation would represent a significant portion of what has been diverted.”
According to U.S. Geological Survey data published by citizen-led advocacy group Grow the Flow, as of Monday the Great Salt Lake was 6.1 feet below its minimum healthy level and the lake is just over 36% full, readings that reflect the water body’s critically low status.
In a Sunday social media posting, O’Leary argued that his Utah data center project would not contribute to further decimation of the Great Salt Lake, which at the moment has over 54% of its lake bed exposed compared to coverage at its natural elevation of 4,207 feet.
“There’s lots of rumors that we’re going to suck the Great Salt Lake dry,” O’Leary wrote in a post on X. “That’s ridiculous. Of course that’s not gonna happen. In fact, if anything, we’ll be adding to the Great Salt Lake because the water rights on that land will be used and one of the hyperscalers even said to us, ‘Let’s use air cooled so there’s no water involved.’ There’s lots of different optionality here, but the rhetoric around that site is just a lot of misinformation.”
Utah Gov. Spencer Cox has echoed some of O’Leary’s claims about how data center water use issues are being framed.
During his monthly KUED press conference on April 30, Cox said he didn’t believe the proposed data center represented Utah’s most important economic development opportunity but believes it can be done “in the right places and in the right way.”
“We should be very careful with our resources,” the governor said. “Unfortunately, there’s a lot of really bad information out there about data centers. Especially when it comes to water use.”
According to tracking by the National Integrated Drought Information System, the vast majority of Utahns, some 2.8 million people, are currently living in drought conditions. The Alberta site where O’Leary is hoping to build his Wonder Valley data center complex is amid a mostly agricultural area similar to the proposed Utah site. And farmers and ranchers in Alberta are facing drought conditions much like those in Utah.
University of Calgary researchers report that in the Peace Region, where the Wonder Valley project is set for construction, both livestock and grain producers have struggled owing to drought. A July 2025 Provincial Crop Report showed that “79.1% of hay and pasture land in the region was rated as “poor” to “fair” — a 39% increase over the five-year average.”
“Our supply of fresh water is precious and finite, and data centers could jeopardize it,” researchers wrote.
Hurry up and wait?
The rushed data center regulatory processes in both Utah and Alberta have elevated the concerns of residents and environmental advocates who argue the extensive impacts on natural resources and air quality require thorough and thoughtful assessments. But O’Leary has countered that the competitive playing field for data center development requires a fast-moving path, including during his testimony, via videoconferencing, before a MIDA vote on his Utah data center proposal on April 24.
“I must say, why we are rushing this so fast is it’s a competition,” O’Leary said. “There are other campuses but we’ve got tenants knocking on our door. The whole world knows about this project now.”
And Cox sided with O’Leary when asked about the pace at which the Stratos proposal is earning government sign-offs in Utah.
“People have had a chance to provide feedback,” Cox said during his KUED press conference late last month. “This whole idea of being rushed … I’m so tired of our country taking years to get stuff done. It’s the dumbest thing ever. We think that taking time makes things better or safer? It absolutely does not. If we can’t put this here then we can’t put them anywhere.”
In spite of the hurry-up routine, O’Leary’s project in Alberta has already fallen well behind the initial schedule he had shared with residents and government officials. In late 2024 when the Wonder Valley project was announced, developers said construction would begin in 2026 with the first phase of the project coming online in 2027. At the moment, construction is not expected to begin until 2028.
It’s also not clear if the path of O’Leary’s Alberta project so far is being considered by those granting approvals for moving the Utah version forward. The Box Elder County Commission didn’t respond to multiple requests from the Deseret News seeking information on the process, including whether or not commissioners or their staff had made contact with or sought information from Alberta officials ahead of their vote last week.
While declining to answer questions from the Deseret News, the Box Elder County Commission shared a statement with media outlets Monday about voter-driven referendum to overturn the county’s decision on O’Leary’s project. The county received the application last week and has 20 days to respond under Utah law.
“If the referendum moves forward successfully, it would void the consent and agreement approved by the Box Elder County commissioners — not necessarily stop the project itself,” according to the statement. ”hat means the project could possibly still move forward, but without the concessions, conditions and protections negotiated by the county. The county commissioners worked tirelessly to secure the best possible outcome for the county, and a successful referendum could undo those negotiated protections and agreements.”
