Big Short's Michael Burry Says Pentagon's Claude Phaseout Shows Government Can't Rely on Palantir Alone

Anthropic's Claude AI secured the top position in US app downloads over the weekend, surpassing rivals like OpenAI's ChatGPT, after the Pentagon blacklisted the AI research and safety company for refusing to ease safeguards for military use of its AI model.

The US government uses AI technology like Claude and those from Google and OpenAI through a secure framework provided by AI tech leader Palantir Technologies. On Friday, the US government directed defence contractors to stop working with Anthropic.

However, the government offered a six-month phaseout period of Claude AI despite saying the technology poses a supply-chain risk. Big Short's Michael Burry, who made a fortune betting against the housing market in the 2008 global financial crash, said the US decision to phase out Claude AI over six months shows how important the technology has become for the government.

'Removing Claude was a Trumpian thing to do. He and his people were offended. The 6-month phase out was the military saying uh, we need Claude for a minute here, and no, the Palantir wrapper with those other models alone is not enough,' Burry said on X yesterday. 'Shows the stickiness is Claude's tech, not Palantir's.'

Palantir provides AI services to government agencies by integrating with various models. The US government does not use leading AI models directly for sensitive works, but embeds them into secure data frameworks such as Palantir's products, like Gotham, Foundry, and AIP, which serve as the substrate for AI integration. Note that Claude is deployed inside Palantir via Amazon Web Services' GovCloud platform.

However, Burry believes that the US government scrapping its partnership with Claude AI shows that relying solely on Palantir paired with AI models from alternative providers is not a good enough substitute.

Palantir's Nefarious Accounting Tricks

Burry also disclosed a short position on Palantir in November 2025, citing fears about its extremely high AI-hype-driven valuation. The investor also recently took aim at the firm's sinister accounting practices and its CEO's huge spending on a personal jet.

In an X post of excerpts from his latest Substack column titled 'Palantir: An Accounting,' Burry said Palantir's accounts receivable has grown much faster than actual revenue in recent quarters, indicating that the company could be booking sales aggressively through 'nefarious tricks.'

'In 9 of the last 12 quarters, AR (account receivables) grew faster than revenue – a persistent pattern generally attached to nefarious tricks such as channel stuffing, aggressive revenue recognition, or extended payment terms used as sales concessions,' Burry wrote based on his analysis of Palantir's 10-K filing with the US SEC.

Furthermore, Burry believes Palantir's financials resemble those of a consulting firm rather than a SaaS company, which typically has stable, predictable subscription income. However, Palantir's income looks uneven, with big ups in some quarters and downs in others.

Overall, investors remain curious to see whether Palantir's business will be impacted by Claude's removal from federal infrastructure. Palantir earned nearly $2 billion in revenue from the US government last year.

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