Alex Karp Calls Big Short Investor Michael Burry Crazy

"The two companies he's shortselling are making all the money, which is extremely strange," Karp told  "Squawk Box." "The idea that chips and ontology are the only things you want to shortsell is absolutely absurd."

Karp further said, "He's actually shortselling AI... It was us and Nvidia."

When contacted by PLPL via email for comment on Karp's remarks, Burry declined to comment.

Shares of software company Palantir fell nearly 9% on Tuesday, even though the software company beat Wall Street estimates for the third quarter and provided optimistic guidance. Investors are becoming increasingly wary of the lofty valuations of AI-related names. Palantir shares, which were up 173% this year before Tuesday's trading, have a forward price-earnings ratio of 228. Nvidia, after rising more than 50% this year, fell more than 2%.

"I think this behavior is very serious, and I will shut up when it's proven wrong," Karp said of short sellers.

Burry's hedge fund Scion Asset Management disclosed in a filing that it held put options against Nvidia and Palantir, with an estimated value of approximately $187 million and $912 million, respectively, as of September 30. The filing did not specify strike prices or expiration dates for the contracts.

It's unclear whether Burry is profiting from Tuesday's decline. This filing reflects his position at the end of September, and he may have adjusted his portfolio by now. Burry declined to comment on his position.

"It's also unclear whether he's shorting us. Maybe he's just thinking, 'How do I get out of my position and not look foolish?'" Karp said.

This revelation comes after Burry signaled renewed caution in the markets in a cryptic post on X last week.

"Sometimes, we see bubbles. Sometimes, something has to be done about it. Sometimes, the only winning move is not to bet," he wrote to his 1.3 million followers on the platform.

Burry gained fame for his visionary bet against mortgage-backed securities before the 2008 financial crisis, which is described in Michael Lewis's The Big Short and the Oscar-winning film of the same name.

"It's very complicated with shorts... Frankly, I think what's happening here is market manipulation," Karp said. "This is the best outcome we've ever seen. It's also unclear whether he's doing this to save his own life. I mean, these people claim to be ethical, but in reality they're harming one of the biggest businesses in the world."