Palantir CEO Alex Karp has gone on the offensive after “Big Short” investor Michael Burry revealed massive short positions against Palantir and Nvidia. The clash highlights the growing divide over whether the artificial intelligence boom is sustainable—or just another bubble waiting to burst.
Michael Burry’s New Short Targets
Michael Burry, the hedge fund manager made famous by his bet against the housing market before the 2008 crash, has taken aim at two of the most dominant forces in the AI sector: Palantir Technologies (PLTR) and Nvidia (NVDA).
According to a recent SEC filing, Burry’s firm, Scion Asset Management, disclosed large put-option positions representing roughly $912 million against Palantir and $187 million against Nvidia as of the end of September.
While the filing doesn’t reveal strike prices or expiration dates, it clearly shows Burry is betting against some of the biggest winners of the AI trade. It also suggests that the famed contrarian investor sees the current AI rally as overheated.
Alex Karp Fires Back
Palantir CEO Alex Karp responded aggressively during an appearance on CNBC’s Squawk Box, calling Burry’s bet irrational and “bats*** crazy.”
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp said. “The idea that chips and ontology is what you want to short is bats*** crazy.”
Karp continued by framing Burry’s move as a short against the broader AI movement.
“He’s actually putting a short on AI. It was us and Nvidia,” he said.
When CNBC reached out to Burry for comment, he declined to respond.
Palantir’s Stock Slides Despite Strong Earnings
Palantir’s third-quarter report beat Wall Street expectations across the board, with strong revenue growth and an upbeat outlook. Still, the stock dropped nearly 9% on Tuesday’s session, as investors questioned the sustainability of AI-driven valuations.
Palantir shares were up 173% year-to-date going into the selloff and now trade at a forward price-to-earnings ratio near 228, a level that has made some analysts uneasy. Nvidia also dipped more than 2% on the day despite logging over 50% gains in 2025.
Karp expressed his frustration with what he sees as market manipulation.
“With the shorts, it’s very complex. Honestly, I think what’s going on here is market manipulation,” he said. “We delivered the best results anyone’s ever seen. These people claim to be ethical, but they are actually shorting one of the great businesses of the world.”
Burry’s Broader Warning
Just days before the filing became public, Burry posted a cryptic message to X (formerly Twitter):
“Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
The statement echoes the same caution that made him famous during the housing collapse nearly two decades ago. Whether his AI short pays off, however, remains to be seen.
Why It Matters for Investors
This clash between two high-profile market minds underscores a key question: Is the AI trade still in its early innings, or are valuations already disconnected from reality?
For investors, the takeaway is twofold:
- Valuations matter again. Palantir’s growth is undeniable, but at 200x earnings, even minor disappointments can trigger major volatility.
- Don’t underestimate contrarian signals. Michael Burry has a track record of spotting bubbles early. While his timing isn’t always perfect, his moves can serve as a barometer of market excess.
Investor Insight
Palantir’s fundamentals remain solid, with revenue growth exceeding 60% year-over-year and government contracts expanding rapidly. Nvidia’s GPU dominance in AI infrastructure also remains unmatched. But when seasoned contrarians like Burry take the opposite side of the hype, it’s a signal to evaluate positions with fresh eyes.
Burry may be early—or he may be right again. Either way, his short against AI’s biggest winners is a reminder that every boom eventually meets its test.
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