Some biologists say it could be a giant squid or octopus. Others think it might be a piece of whale blubber.
But the most exciting suggestion is the 12-metre blob is a completely new species of creature.
It was spotted by the Chilean navy, who at first thought it was part of a beached whale. But experts say it's too big to be a whale skin and does not have the right feel or smell.
Amazed
Could it be part of a squid?
They got in touch with some marine biologists, who were amazed when they found the blob did not have a backbone.
The scientists had never seen such a strange specimen.
Samples of the blob are now being sent to scientists around the world so they can try to work out what it is.
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Watch Lizo Mzimba's report
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