Kevin O'Leary warns China is winning the AI race because U.S. states are slowing data center production

As data center projects continue to get shut down across the country, "Shark Tank" star Kevin O'Leary and other investors are warning that the facilities are needed to compete with China in the artificial intelligence race.

Data centers are at the forefront of the continued development of AI, serving as the hardware for the large amount of electricity and infrastructure needed to improve response time and data storage. But opponents cite utility costs to local residents and environmental concerns in their efforts to block development of new centers.

Kevin O'Leary visits the set of "Outnumbered" at Fox News Channel Studios in New York City on April 18, 2024. (Roy Rochlin/Getty Images)

"If everybody talks about data centers, too much heat, too much noise, too much water, all that, that was 20 years ago," O’Leary told Fox News Digital. "Today's technology is completely different in terms of the heat profile, in terms the water profile, in terms how big these buildings have to be and where they have to be, because we've got air-cooled technology and obviously the chip technology's advanced."

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O’Leary said China is focused on improving its power grid, which is needed in order to support the massive electricity demands of running a data center. He noted that data centers can function using varied energy sources.

Protesters react as the Box Elder County Commission approves a large AI data center project in Tremonton, Utah, on May 4, 2026. Activists opposed the proposed 40,000-acre development over concerns about water use, energy demand and environmental impact. (Natalie Behring/Getty Images)

"Most of it is coming from burning nat[ural] gas, which is very clean now, with turbines," he said. "Hopefully nuclear power one day, some solar, some battery, all of it together. I think the key is that they're beating us because they're getting more power sooner, and then they're building these data centers to train their own AI. The country that has the best AI will have the best economy and the best defense, the best military, and win all the wars because it's going robotically."

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President Donald Trump has pushed hard for new data center production. Last July, he signed an executive order titled "Accelerating Federal Permitting of Data Center Infrastructure" which directed agencies to reduce the regulatory burdens that have been slowing data center development.

Earlier this week, Fox News Digital obtained a letter to Acting Attorney General Todd Blanche from Sen. Tom Cotton, R-Ark., calling for federal investigators to examine whether foreign actors are attempting to shape U.S. public opinion and policy against data centers and AI development as Washington and Beijing compete for dominance in artificial intelligence.

Sen. Tom Cotton, R-Ark., arrives for a vote in the U.S. Capitol on April 30, 2025, stating the war with Iran will continue for weeks as the U.S. limits their offensive capabilities. (Bill Clark/CQ-Roll Call, Inc via Getty Images)

"Recent reports show that Communist China is attempting to influence our policy and public opinion on data centers. The reason is obvious: They want to kneecap our processing power to win the AI race," Cotton told Fox News Digital.

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Despite the push to put U.S. production ahead of Beijing, some liberals in Congress have been reluctant to get on board with data center development. In March, Sen. Bernie Sanders, I-Vt., and Rep. Alexandria Ocasio-Cortez, D-N.Y., introduced the Intelligence (AI) Data Center Moratorium Act.

"Congress has a moral obligation to stand with the American people and stop the expansion of these data centers until we have a framework to adequately address the existential harm AI poses to our society," Ocasio-Cortez said in a statement about the legislation. "We must choose humanity over profit."

Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez hold a press conference at the U.S. Capitol in Washington, D.C., on March 25, 2026, to announce the Artificial Intelligence Data Center Moratorium Act. (Tasos Katopodis/Getty Images)

But some experts tie data center production to economic gains, saying that the jobs created from the facilities benefit communities and local economies.

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"In the first six months Trump was in office, over 90% of all economic growth came from new computer and AI investment, and much of it came from data centers," Judge Glock, director of research and a senior fellow at the Manhattan Institute, told Fox News Digital. "Without continued growth in data centers, we would have higher unemployment and lower incomes. Data centers also bring big gains to local communities."

Leading voices in AI also noted China’s ability to construct data centers at a much faster rate than the U.S. Last November, Nvidia CEO Jensen Huang said the communist country’s building capabilities far exceed that of the U.S.

"If you want to build a data center here in the United States, from breaking ground to standing up an AI supercomputer is probably about three years... they can build a hospital in a weekend."

President Donald Trump speaks with Elon Musk and Nvidia CEO Jensen Huang during the Saudi Investment Forum at the Kennedy Center in Washington on Nov. 19, 2025. (Evan Vucci/AP)

O’Leary said the competition with China should alarm Americans, adding that if the U.S. falls too far behind, Beijing could gain the ability to devastate the U.S. economy and national security.

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While production capabilities are in question, widespread data shows that the U.S. currently has a significantly higher number of functional data centers already built compared to the number reported in China.

According to Statista, the U.S. has more than 4,000 facilities as of April, while China has just over 300 — fewer than the United Kingdom and Germany. Still, O’Leary warned that China could outpace the U.S. over the long term if the U.S. slows development.