"Shark Tank" investor Kevin O'Leary told Business Insider that the current AI boom is not a bubble like the dot-com era, because its impact on productivity can be clearly measured in financial terms. While some experts, including Nobel laureate Paul Krugman and fund manager Bill Smead, have drawn parallels between today’s AI enthusiasm and the internet frenzy of the late 1990s, O'Leary argues the two are fundamentally different. He pointed out that today’s AI technologies deliver tangible, dollar-for-dollar value. For example, he cited Fly Guys, a drone company he has invested in, which uses AI to scan rooftops and generate actionable insights. These services help large businesses like Walmart and Home Depot identify maintenance issues and automatically create work orders, saving millions in operational costs. O'Leary believes these efficiency gains can help companies absorb the impact of tariffs and sustain high stock valuations. He expects the true test of AI’s economic impact to come in the next 12 to 18 months through corporate earnings reports. Regarding tariffs, O'Leary says the market’s sharp reaction in early April—when President Trump announced new tariffs—was overblown. Despite the initial sell-off, markets have since rebounded to record highs. He attributes this recovery to growing clarity around the actual scope and impact of the tariffs. He noted that the rates imposed—ranging from 10% on the UK to 41% on Syria—are manageable for many trading partners, with most falling between 10% and 15%. Importantly, inflation has remained subdued, with the consumer price index rising just 0.2% in April, 0.1% in May, and 0.3% in June. This suggests that input costs have not yet eroded corporate margins as feared. O'Leary said the widespread panic over tariffs has been misplaced. “Basically, everybody got it wrong,” he said. He emphasized that the lack of inflationary pressure and continued strong consumer spending signal a resilient economy. He also shared that he and his team are increasing inventory ahead of the holiday season, a move that reflects their bullish outlook. This activity, he said, is a strong indicator that business leaders are confident in demand and economic conditions. For investors, O'Leary stressed the importance of staying in the market during downturns. He warned that panic selling can lead to missed opportunities. He pointed out that the S&P 500 has gained about 27% from its April 8 low and is roughly 12% higher than before the sell-off—far outpacing the market’s long-term average annual return of 7%. That kind of return, he said, can be achieved in just 88 trading sessions if investors stay committed.