Michael Burry, the investor made famous in the movie, The Big Short, is turning his attention to what he sees as the next market bubble: artificial intelligence (AI). His hedge fund, Scion Asset Management, recently disclosed that it had a short bet worth $1.1 billion against two of the biggest names driving the AI book: Palantir Technologies and Nvidia.

This follows a broad global tech selloff that is weighing on markets.

A short is a bet that a stock will fall in value. In Burry’s case, he is shorting Palantir and Nvidia, meaning he has made financial arrangements to profit if their stock prices drop, rather than rise. It’s a way for investors to profit from market declines.

Analysts note that a small group of AI-focused companies, including the so-called “Magnificent 7,” which consists of companies such as Meta and Nvidia have contributed disproportionately to market gains this year, making indexes vulnerable to selloffs.

Palantir, which began as a data analytics platform for American government and intelligence agencies, has become a high-profile AI stock. Its revenue in the third quarter rose 63% to $1.2 billion, beating expectations, and its full-year outlook remains strong. Yet the company’s valuation, around $450 billion, is extremely high relative to its revenues of roughly $4.4 billion.

Palantir CEO Alex Karp fired back at Burry on CNBC, calling the trade: “market manipulation.”

Karp said: “The idea that chips...is what you want to short is batshit crazy,” Karp said, adding that he plans to: “dance around” when Burry’s bet fails.

For now, one thing is clear: the man who once shorted the American housing market has just picked a new target: Silicon Valley’s AI empire.