Scott Galloway Professor of marketing at NYU Stern and author of bestselling books including The Four and The Algebra of Wealth.

“Microsoft renovated with cash on hand, and Alphabet appears to be taking out second mortgages for the same renovation, which is going to result in kind of a different call from the bank, if you will.”

The Prof G Pod with Scott Galloway · Tech Strategy & Big Tech · November 2026

Context

A clip from Scott's markets show, replayed in the weekly roundup, explaining why Alphabet fell nearly 13% after earnings while Microsoft rose. Both are spending heavily on AI, but investors rewarded Microsoft's cash-funded capex and punished Alphabet's cash burn.

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Transcript

The Prof G Pod with Scott Galloway Around 13:14 into the episode

Speaker 4

…the needle here. And that, as they said, we're going to surprise to the upside on the top line and the bottom line. And what I think really excited people is their CapEx looked fairly disciplined. Now, granted, it's still unbelievable. It's still out of control, but it looks fairly disciplined.

Speaker 1

Compared to the alternatives.

Speaker 4

…its AI business. But what they don't see, or what they also see, is that AI is an existential threat to their ability to generate the cash flow they need. Need for CapEx for the arms race. And the anecdotal evidence, I don't know if you find this, I am now doing basic search on Claude. And at some point, that's just going to show up in the numbers. But what Microsoft did, it was unbelievable. Microsoft renovated with cash on hand, and Alphabet appears to be taking out second mortgages for the same renovation, which is going to result in kind of a different call from the bank, if you will. So, really, two divergent results here. And the largest market cap erosion, single-day market cap erosion in the history of the company, that's a big deal.

George Hahn

Alphabet and Amazon aren't the only ones in the red. Ed Elson pointed out that nearly every hyperscaler is now spending more than it makes. And explain what that means for investors.

Speaker 1

But I do think that the real problem, in my view, is that negative free cash flow. And to be clear, Google is not alone there because we also know that Oracle's free cash flow is negative. Meta's free cash flow is negative now. Amazon's free cash flow is negative now. All of the hyperscalers have…

George Hahn

It was a week of election maps, live counts, and market alerts. To close, Stanford psychiatrist Anna Lemke, author of the new book, Radical Surrender, told Scott on Tuesday's bonus conversations episode, how to get out of your own head and back into the world. We just

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

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