During last night's double elimination, Lovato's acts Paige Thomas and Jennel Garcia both found themselves in danger of elimination.
When the judges were given their chance to vote, both Britney Spears and LA Reid chose to send home Garcia. Cowell then refused to pick before Lovato, forcing her to choose between her artists.
While Lovato opted to send Thomas home, Cowell eventually voted for Garcia, so she was the one to be eliminated.
Speaking backstage, Cowell told E! News: "I knew I was going to keep Paige, which meant that [Demi] wouldn't have had to make the decision. I thought, 'Bearing in mind they're both your artists, I want to see which one you're going to destroy career-[wise]'.
"It was just fun to see her squirming. She thought she was going to get out of it and I said, 'You're not'."
However, Lovato stood by her decision, saying: "I picked Paige because I genuinely think that Jennel is just more talented. I think Paige has more star quality, which is going to help her, but Jennel definitely didn't deserve to go home."
Cowell's act Lyric145 were also eliminated from The X Factor USA in last night's result show.
Watch Jennel Garcia's elimination from The X Factor USA below: