Michael Burry, the hedge fund manager made famous by “The Big Short,” is now targeting Palantir, the data analytics company that has become a central player in the NHS’s push into AI. His new bearish bet implies as much as 200 billion dollars of downside for a firm that has been pitching itself as indispensable to modern healthcare. The key questions are what in Palantir’s recent filings sparked this move, why he thinks it strikes at the heart of the company’s growth story, and how much uncertainty still surrounds both his position and the scrutiny of Palantir’s NHS contracts; I focus on what can be verified in primary documents before weighing the open questions.
Burry’s Track Record and Latest Bet Against Palantir
Michael Burry’s reputation rests on his early and highly profitable wager against US subprime mortgages during the 2008 housing crisis, where SEC filings showed Scion Asset Management delivering gains of about 489 percent for investors while broad equity benchmarks fell sharply. That history gives his new target, Palantir, a particular resonance for investors who remember how his contrarian analysis once exposed structural weaknesses that most of Wall Street ignored. According to high-profile reporting on his latest call, Burry is now arguing that Palantir’s current valuation could collapse by roughly 200 billion dollars, implying an 80 percent or larger decline from a market capitalization he pegs at about 240 billion dollars.
In that coverage, Burry is portrayed as seeing Palantir’s artificial intelligence narrative as overhyped relative to its underlying economics and competitive position. One detailed account of his remarks quotes him likening the company to an “emperor has no clothes” story, arguing that investors have been dazzled by the promise of AI and government contracts while overlooking what he views as aggressive accounting and a business that relies on technologies and models other firms can increasingly access. That framing sets up his Palantir bet as not just a trade on a single stock but a broader challenge to one of the market’s flagship AI names.
Palantir’s Expanding Footprint in UK Healthcare
Burry’s timing is striking because it collides with Palantir’s biggest push yet into British public services: the NHS Federated Data Platform. NHS England’s own primary announcement of the FDP award confirmed that a consortium led by Palantir had secured a contract worth up to £330 million over seven years to build and run the new platform. That document described the deal as “new NHS software to improve care for millions of patients,” positioning the Federated Data Platform as infrastructure to link data across hospitals and community services so staff can manage waiting lists, coordinate care and plan capacity more effectively.
A separate primary NHS governance update on the FDP identified Palantir as the lead technology provider in the FDP-AS consortium and set out how the project would move from transition into full operation from 2024 onward. NHS England framed the platform as a way to bring together operational data for around 56 million patients while stressing that it would not include certain categories of highly sensitive personal information and that data use would remain under NHS control and permissions. That official positioning has been central to Palantir’s pitch that its NHS work is about logistics and system efficiency rather than commercial exploitation of individual medical records.
The NHS Deal Under Fire: Ethics and Transparency Concerns
Even as Palantir and the NHS highlight potential benefits, the Federated Data Platform has become a flashpoint for concerns about ethics, transparency and corporate influence over public healthcare. A major accountability report on internal NHS briefings described officials warning about adoption risks and reputational fallout linked to Palantir’s role in the FDP. According to that reporting, internal documents flagged worries that clinicians and patients might resist using systems associated with a company better known for security and intelligence work, and questioned whether the rollout could meet ambitious usage targets across NHS trusts.
Political scrutiny has intensified around Palantir’s broader portfolio of UK public contracts, particularly its work with the Ministry of Defence. One in-depth piece on calls to halt Palantir contracts detailed how MPs and campaigners have argued that the company’s ties to the MoD sit uneasily with its growing role in civilian healthcare data. That reporting linked the controversy to a procurement pathway in which a planned follow-on defence agreement worth hundreds of millions of pounds was set to be awarded without open competition, and noted that regulators had become involved in transparency disputes over meeting records and contract details but had not yet resolved those questions.
Palantir and the MoD: A No-Competition Defence Deal
The defence angle matters because it illustrates how Palantir has embedded itself in sensitive parts of the UK state while often operating through bespoke procurement routes. A primary procurement transparency notice from the Ministry of Defence set out the department’s intent to award a follow-on agreement to Palantir with a contract value of £480 million and described the planned scope for data and analytics services. That notice also explained that the MoD intended to proceed without a competitive tender, citing specific exemptions in procurement rules to justify the direct award.
Critics have seized on that £480 million figure and the lack of competition as evidence that Palantir’s UK government footprint is expanding through opaque channels that are hard for Parliament and the public to scrutinize. Supporters counter that the company has already built complex defence systems and that switching providers midstream could be costly and risky, particularly where operational military data is involved. For investors parsing Burry’s thesis, the MoD notice provides a concrete example of the high-value, politically sensitive contracts that underpin Palantir’s revenue growth but also expose it to reputational and regulatory risk.
Breaking Down Burry’s Valuation Critique
The most concrete window into Burry’s current positioning comes from regulatory filings. Scion Asset Management’s Primary SEC Form 13F for the end of the fourth quarter of 2024 lists put options referencing 1.1 million Palantir shares, confirming that Burry has taken a reportable bearish stance on the stock. That filing, however, does not disclose the strike prices, maturities or whether the options are part of a larger hedging strategy, which limits how precisely outsiders can gauge his risk exposure or potential payoff profile.
In public commentary summarized by a reputable explainer on his Palantir call, Burry has been quoted as arguing that the company’s fair value sits in a range of about 7 to 9 dollars per share compared with a market price above 50 dollars at the time of his remarks. That gap underpins his projection of roughly 200 billion dollars of potential downside and reflects his view that Palantir’s AI story is being priced as if it were a scarce, irreplaceable asset rather than a software provider facing intensifying competition and the commoditization of large language models. He has also criticized what he sees as accounting choices that flatter profitability, particularly the heavy use of stock-based compensation.
Palantir’s Numbers: What the 10-K Shows
To test parts of Burry’s critique, I looked to Palantir’s own filings. The company’s latest Primary annual report on Form 10-K sets out its headline figures, including total 2024 revenue of 2.2 billion dollars. The filing breaks down revenue by segment and geography and confirms that government contracts remain a substantial share of the business, with international public-sector deals, including the NHS and MoD work, contributing to what Palantir describes as strong growth outside the United States.
The same 10-K details the scale of Palantir’s stock-based compensation, which Burry and other critics say inflates reported margins by shifting costs into non-cash line items. In the risk factors and management discussion sections, Palantir acknowledges that it faces competition from other analytics and AI providers and that rapid advances in large language models could erode some of its differentiation if rivals can offer similar capabilities using broadly available tools. That disclosure aligns with the concern, highlighted in coverage of Burry’s thesis, that commoditized LLMs may limit how much pricing power and long-term moat Palantir can sustain in its AI products.
Market Reaction and Broader Implications for Palantir
Investors did not ignore the appearance of Palantir puts on Scion’s 13F. Market data cited in the same explainer on Burry’s prediction reported that Palantir’s share price fell about 5 percent after his position became public in February 2025, a move that reflected both his notoriety and existing concerns about valuation. However, that reaction was relatively modest compared with the 80 percent-plus downside he has suggested, and trading volumes and subsequent price action indicated that the market was far from unanimous in embracing his view.
One reason Palantir still commands a premium multiple is the growth narrative tied to contracts like the NHS FDP and the MoD follow-on. In its latest 10-K, the company highlighted strong international momentum and pointed to government deals as a key driver of revenue, with analysts quoted in coverage of the stock estimating that such contracts helped deliver around 20 percent international revenue growth in the fourth quarter of 2024. That same reporting acknowledged, though, that the evidence on the absolute scale of Burry’s short exposure is thin, since 13F filings capture only a slice of his portfolio and omit crucial details about derivatives, leverage and offsetting positions.
Palantir’s NHS Bet: Growth Engine or Political Liability?
The tension between growth and political risk is acute in the NHS Federated Data Platform. NHS England’s governance update on the FDP describes a transition period in which trusts are expected to move from legacy data tools onto the new platform, with Palantir’s software sitting at the core of how hospitals track waiting lists, theatre capacity and discharge planning. If adoption proceeds smoothly and internal usage targets are met, Palantir gains a flagship reference customer in one of the world’s largest public health systems, strengthening its case to other governments and health providers.
The internal briefings reported by major coverage of NHS officials’ concerns suggest that outcome is not guaranteed. Officials cited in those documents warned that clinicians might resist tools associated with Palantir, that data governance questions could fuel public backlash and that reputational issues might slow or even block deployment in some settings. For an investor weighing Burry’s thesis, the FDP becomes a test case: if Palantir can show that it can deliver measurable improvements in care pathways while maintaining public trust, it strengthens the bull case; if the project stumbles amid ethics disputes and adoption shortfalls, it lends weight to arguments that the company’s political and social licence is more fragile than its valuation implies.
What Investors Should Watch Next
Several key uncertainties will determine whether Burry’s projected 200 billion dollar crash looks prescient or alarmist. On the performance side, NHS England has outlined governance structures for the FDP but has not yet published a full set of outcome metrics tied directly to Palantir’s software, leaving outsiders reliant on partial updates and internal documents. On the financial side, Scion’s 13F disclosure confirms the existence of Palantir puts but does not reveal his complete thesis, time horizon or risk controls, so investors cannot simply “copy” his trade based on public data.
In the meantime, Palantir’s defenders point to the company’s 2.2 billion dollars of 2024 revenue reported in its Primary 10-K and argue that its blend of government and commercial contracts gives it a durable franchise even if AI tools become cheaper and more widespread. They also note that regulators scrutinizing transparency around NHS and MoD contracts have not yet imposed remedies that would materially alter existing deals, although ongoing calls in Parliament keep that risk alive. For now, the most practical approach is to monitor how the NHS Federated Data Platform rollout progresses, watch for any further disclosures about Palantir’s UK contracts and keep an eye on Scion’s next 13F to see whether Burry is doubling down, taking profits or quietly exiting his bet against the NHS data giant.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
