Kevin O'Leary warns against putting 'harness' on AI: 'Massive capital' needed to move it forward

'Shark Tank' star optimistic about AI stocks, but having 'hard time' with valuation

O’Leary Ventures Chairman and "Shark Tank" star Kevin O’Leary, an early investor of booming stock Nvidia, provided insight into the AI craze and cautioned against policymakers messing with market demand.

"Every time we get a huge technological shift, there's fear and loathing. But in the end, the way to look at this, it's just another tool," O’Leary said Wednesday on "Varney & Co." "And I'm very, very optimistic that this particular tool will enhance productivity in America in remarkable ways."

"Why would you put any kind of a harness on this?" he continued. "Because the best regulator for AI is the market itself. It's so expensive that you need massive capital to make this move forward."

O’Leary’s comments come as Nvidia — a leading tech company in artificial intelligence innovation — recorded its second consecutive record closing price on Wednesday.]

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Headquartered in Santa Clara, California, Nvidia has become an AI powerhouse because of its advanced graphics processing units (GPUs) and semiconductors used to power and train AI platforms.

O’Leary Ventures Chairman and "Shark Tank" investor Kevin O’Leary calls the AI sector "the hot new ticket in venture" on "Varney & Co." on Wednesday. (Fox News)

Nvidia’s stock price has risen this week from over $464 per share at Monday’s open to more than $492 a share as of Wednesday’s close. The stock rose by $1.06 in after-hours trading as of 6:30 p.m. Wednesday.

Over the course of 2023, Nvidia’s stock has surged by 244%, rising from $143 per share on Jan. 3

O’Leary also pointed out that an insurance executive claimed they can cut costs by 30% through the use of AI in their global sales operations.

"So I think the same will occur in multiple areas of our economy, all 11 sectors," O’LDespite Nvidia’s stock surge, the "Shark Tank" investor expanded on why he wouldn’t work new money into the tech company.

"I'm having a hard time with the valuation right now," O’Leary explained. "It is wildly expensive. But it was part of a portfolio that was betting on semiconductors being a narrative for years to come, primarily around EVs. And I captured it in that play and it, of course, outperformed everything else.

He also pointed out that "billions" of dollars from the venture community are currently being poured into the AI sector.

"Only a year ago it was Web3. Now the hot new ticket in venture is AI, but nobody's making any money," O’Leary said. "So you have to bet on all kinds of different players. Meanwhile, for the guys that are selling the picks and shovels, that's Nvidia. I'll go there."