• Walter Isaacson told CNBC's "Squawk Box" about a heated exchange he documented between Elon Musk and Bill Gates.
• Musk gets very upset when people short Tesla stock to try and make a profit, and he called out Gates for doing so.
• Isaacson said Musk exploded, and he later received a text from the billionaire that called Gates "insane" among other things.

Walter Isaacson's book "Elon Musk" hit shelves Tuesday, and the author told CNBC's "Squawk Box" about a heated exchange he documented between the Tesla CEO and Bill Gates.

Isaacson said his book chronicles the good, bad and ugly behind Musk, and that one of the things that upsets the billionaire is when people short Tesla stock to try and make a profit. Early last year, Musk met with Gates, co-founder of Microsoft, who had previously shorted the automaker's stock and bet that it would decrease in value.

"The demons and dancing in Elon Musk's head include people who short Tesla," Isaacson said Tuesday.

Gates wanted to discuss philanthropy efforts around climate change with Musk, and Isaacson said that since Musk did not have an assistant at the time, the two had to text directly to set up the meeting. When Gates arrived, one of the first questions Musk asked was whether Gates was still shorting Tesla, and Gates answered honestly: He was.

Isaacson said Musk exploded, and Isaacson later received a text from Musk that called Gates "insane" among other things.

Representatives for Gates and Musk did not immediately respond to requests for comment.

Read more about the encounter in an excerpt from Isaacson's book here.