The 24-year-old comedian commented on Grande's fame during a routine and joked, "Britney Spears didn't have a terrorist attack at her concert," according to the Mirror.
Pete was referencing the May 2017 tragedy which killed 22 people and injured more than 800 at the Manchester Arena.
"This has been v tough & conflicting on my heart," Ariana responded to the fan on Thursday morning. "He uses comedy to help ppl feel better ab how f-ed up things in this world are.
"we all deal w trauma differently. I of course didn't find it funny. it was months ago & his intention wasn't/ is never malicious but it was unfortunate."
"He lost his dad in 9/11 and is close with other victims of violent tragedies," an insider said. "As a way of coping he turns to humour. …He's obviously sensitive to tragedy as he lost his own father and his intention is to just make people laugh."
Davidson and Grande reportedly began dating in May with a source confirming their engagement one month later.
The happy couple have been quick to show their affection on social media, and recently moved in together in New York.
Sources close to Davidson told PEOPLE magazine that the "joke was taken out of context."