The sudden departure of Nvidia CEO Jensen Huang, mounting concern about an AI investment bubble and the growing cost of U.S. government debt dominated the final day of Web Summit in Lisbon on Thursday. Speakers at one of Europe’s largest technology conferences warned that strain in public debt markets could become a catalyst for the next financial crisis.
The discussion, moderated by Euronews, brought together Adam Kobeissi, founder and editor-in-chief of capital markets publication The Kobeissi Letter, and economist James Galbraith, a professor at the University of Texas at Austin.
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Thursday’s packed schedule followed the cancellation of Wednesday’s programme on Portuguese government advice, ahead of Storm Charles. The storm ultimately brought Lisbon heavy rain and minor flooding, rather than the severe conditions authorities had anticipated.
Why Huang’s Departure Matters To Investors
Huang stepped down on Thursday after revelations of two extramarital affairs. U.S. intelligence reportedly suspects one of the women of spying for China, an allegation Beijing has rejected. Nvidia chief financial officer Colette Kress is serving as interim CEO while the board seeks a permanent successor.
Nvidia shares fell about 15% at the opening bell before recovering some ground. At the time of writing, the stock was down a little more than 5% for the day, at approximately $164 a share. That leaves it more than 30% below its October 5 all-time high of $243.
Kobeissi said Huang should not have resigned, arguing that his exit would be “a net negative for investors” over the next couple of years. He nevertheless remained bullish on Nvidia’s longer-term prospects.
He does not expect the leadership change to affect next week’s planned stock market debut of Anthropic, the company behind the Claude AI models, which is seeking a valuation of up to $1.4 trillion. Nvidia is among seven technology companies that have agreed to buy shares at the offering price.
The AI Race May Test Big Tech’s Spending
Galbraith said Chinese technology could eventually undercut Nvidia’s, raising questions about the hundreds of billions of dollars Microsoft, Alphabet, Amazon, Meta and other hyperscalers are investing in AI infrastructure.
He described the competition as a contest between different economic systems. The United States makes it easier to raise private capital quickly, but can be slower to set policy and make decisions. China, by contrast, can centralize research, technology development and deployment, while intervening more directly in its economy.
Given those differences, Galbraith said he would “tentatively bet on China” in the AI race—and suggested the country could become the world’s largest economy in the coming decades. His assessment underscores a strategic risk for U.S. technology companies: heavy investment in AI does not guarantee that American firms will retain a lasting competitive advantage.
Debt Interest Is A Growing Economic Risk
The panel also pointed to the U.S. government’s interest bill as a vulnerability. Kobeissi said roughly one in every five dollars the government spends goes toward interest on its debt, rather than reducing the principal. U.S. Treasury data show net interest costs reached $1.1 trillion in the fiscal year ending in September—about 19% of federal revenue.
“U.S. debt to GDP ratio is at World War II levels,” Kobeissi said, adding that the debt market was signaling a “higher for longer” interest-rate environment. He warned that, on the current trajectory, the United States faced a “100% chance of bankruptcy,” and argued that central banks could not bring rates down in the prevailing conditions.
Kobeissi tempered that warning: He said the United States was not facing an imminent 2008-style crisis, while cautioning that trends over the next 10 to 20 years were concerning. He also described himself as “a huge bull” on the country, citing the resilience of its economy and the pace of innovation.
Political Divisions Could Complicate A Response
Galbraith recalled that during the COVID-19 pandemic, President Donald Trump and a Democratic-controlled House cooperated on relief measures to stabilize markets. He questioned whether the same degree of political cohesion would be available in a future crisis.
In the recent U.S. midterm elections, Democrats won 255 House seats to Republicans’ 169, according to the Associated Press count cited at the time, with some races still being tabulated. The unresolved contests added uncertainty to an already divided political landscape.
Asked to predict when a financial crisis might occur, Galbraith said the defining feature of such events is that they cannot be foreseen. The panel’s broader message was less about timing than vulnerability: elevated debt costs, questions about AI investment returns and geopolitical competition are risks that markets and policymakers cannot afford to treat in isolation.
