Burry and Karp Clash Over AI Stock Bubble Claims

NEW YORK, NY — Investor Michael Burry, famously known for his role in “The Big Short,” clashed with Palantir CEO Alex Karp over recent claims about the artificial intelligence (AI) stock market. The dispute ignited on social media following Burry’s bearish bets against Palantir, which he publicly detailed last week.

Burry’s Scion Asset Management revealed it held put options on 5 million shares of Palantir, valued at an estimated $912 million, along with similar positions in Nvidia. Karp criticized Burry’s strategy during a televised interview, labeling it as “batshit crazy.” He argued that despite Burry’s claims, Palantir’s innovations are supporting American workers and the military, and their stock performance reflects genuine success.

“As far as I can tell, the two companies he’s shorting are the ones making all the money,” Karp stated on CNBC. He expressed that it’s troubling to see short sellers target companies like Palantir that he believes are doing noble work.

Burry responded on X (formerly Twitter) by questioning Karp’s understanding of stock market filings. He remarked, “Doesn’t surprise me one bit that Alex Karp and his ‘ontology’ cannot crack a simple 13F,” referring to the quarterly reports that detail holdings by investment firms.

Palantir’s latest quarterly report showed a 63% rise in revenue year-on-year, totaling approximately $1.2 billion. This strong performance has contributed to a dramatic increase in the company’s stock value, which has surged roughly 30-fold since the beginning of 2023, leading to a market capitalization of over $422 billion.

Both Burry and Karp’s comments highlight a growing division in the investment community regarding the valuation of AI companies. Many investors are split between viewing this area as revolutionizing business or as a speculative bubble.

The tension between the two investors adds another layer to ongoing debates about the sustainability of the AI boom. With Burry indicating he may close out his position and Karp defending his company’s worth, the outcome of this clash continues to garner attention.

The business world watches closely to see which perspective proves prescient, as debates around the potential bubble in AI technology are sure to escalate ahead of anticipated financial disclosures.