A type 1 hypervisor runs directly on the underlying physical hardware, interacting directly with the processor, RAM, and storage. For this reason, type 1 hypervisors usually take the place of the host OS. Hyper-V is a classic example of a type 1 hypervisor.
A type 2 hypervisor—also called a hosted hypervisor—runs on top of an OS, unlike type 1 hypervisors that usually execute on the underlying physical hardware. They support guest VMs by coordinating calls for the CPU, memory, and storage resources through the underlying physical host’s OS. VirtualBox is a Type 2 hypervisor.
https://www.parallels.com/blogs/ras/hyperv-vs-virtualbox/