diff --git a/package.json b/package.json
index 187ebf10096d66..a4f5060e3dfd72 100644
--- a/package.json
+++ b/package.json
@@ -227,7 +227,7 @@
     "ng-packagr": "~16.2.0",
     "node-fetch": "^2.6.7",
     "npm-package-arg": "11.0.1",
-    "nuxi": "3.6.5",
+    "nuxi": "npm:nuxi-nightly@3.9.2-1699007958.251cab5",
     "nx": "17.0.0-rc.2",
     "octokit": "^2.0.14",
     "open": "^8.4.0",
diff --git a/packages/nuxt/package.json b/packages/nuxt/package.json
index c4e710ae1d14ef..11b0734d5a57ab 100644
--- a/packages/nuxt/package.json
+++ b/packages/nuxt/package.json
@@ -28,7 +28,7 @@
     "migrations": "./migrations.json"
   },
   "dependencies": {
-    "nuxi": "3.6.5",
+    "nuxi": "npm:nuxi-nightly@3.9.2-1699007958.251cab5",
     "tslib": "^2.3.0",
     "@nx/devkit": "file:../devkit",
     "@nx/js": "file:../js",
diff --git a/packages/nuxt/src/utils/versions.ts b/packages/nuxt/src/utils/versions.ts
index e35a31551f1495..dbe792a76b06d6 100644
--- a/packages/nuxt/src/utils/versions.ts
+++ b/packages/nuxt/src/utils/versions.ts
@@ -16,9 +16,4 @@ export const happyDomVersion = '^12.10.3';
 // linting deps
 export const nuxtEslintConfigVersion = '0.2.0';
 
-// TODO(katerina): nuxi version in package.json
-/**
- * Latest nuxi has a bug
- *
- * Nuxi version we use must be 3.6.5 until bug is fixed.
- */
+// TODO(katerina): nuxi version in package.json - add latest - not nightly
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index e536587e04f589..e7ecd1bf7ba765 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -758,8 +758,8 @@ devDependencies:
     specifier: 11.0.1
     version: 11.0.1
   nuxi:
-    specifier: 3.6.5
-    version: 3.6.5
+    specifier: npm:nuxi-nightly@3.9.2-1699007958.251cab5
+    version: /nuxi-nightly@3.9.2-1699007958.251cab5
   nx:
     specifier: 17.0.0-rc.2
     version: 17.0.0-rc.2(@swc-node/register@1.6.8)(@swc/core@1.3.86)
@@ -12588,7 +12588,7 @@ packages:
       normalize-path: 3.0.0
       readdirp: 3.6.0
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
 
   /chownr@1.1.4:
     resolution: {integrity: sha512-jJ0bqzaylmJtVnNgzTeSOs8DPavpbYgEr/b0YL8/2GO3xJEhInFmhKMUnEJQjZumK7KXGFhUy89PrsJWlakBVg==}
@@ -15968,6 +15968,14 @@ packages:
     engines: {node: ^8.16.0 || ^10.6.0 || >=11.0.0}
     os: [darwin]
     requiresBuild: true
+    dev: true
+    optional: true
+
+  /fsevents@2.3.3:
+    resolution: {integrity: sha512-5xoDfX+fL7faATnagmWPpbFtwh/R77WmMMqqHGS65C3vvB0YHrgF+B1YmZ3441tMj5n63k0212XNoJwzlhffQw==}
+    engines: {node: ^8.16.0 || ^10.6.0 || >=11.0.0}
+    os: [darwin]
+    requiresBuild: true
     optional: true
 
   /fstream@1.0.12:
@@ -17761,7 +17769,7 @@ packages:
       micromatch: 4.0.5
       walker: 1.0.8
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: true
 
   /jest-leak-detector@29.5.0:
@@ -19303,7 +19311,7 @@ packages:
       nullthrows: 1.1.1
       walker: 1.0.8
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     transitivePeerDependencies:
       - supports-color
     dev: true
@@ -20482,12 +20490,12 @@ packages:
     resolution: {integrity: sha512-2vPPEi+Z7WqML2jZYddDIfy5Dqb0r2fze2zTxNNknZaFpVHU3mFB3R+DWeJWGVx0ecvttSGlJTI+WG+8Z4cDWw==}
     dev: true
 
-  /nuxi@3.6.5:
-    resolution: {integrity: sha512-4XEXYz71UiWWiKC1/cJCzqRSUEImYRmjcvKpSsBKMU58ALYVSx5KIoas5SwLO8tEKO5BS4DAe4u7MYix7hfuHQ==}
+  /nuxi-nightly@3.9.2-1699007958.251cab5:
+    resolution: {integrity: sha512-KcQ8m6Ld8F+LzDi2c8OP100PIuX0i54jafXkYanRGF/kJtJILLSIVOQ7R9aiIJg4fCOm/QhK+yiU8X924MYfLA==}
     engines: {node: ^14.18.0 || >=16.10.0}
     hasBin: true
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: true
 
   /nwsapi@2.2.2:
@@ -23685,7 +23693,7 @@ packages:
     engines: {node: '>=10.0.0'}
     hasBin: true
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: true
 
   /rollup@3.21.0:
@@ -23693,14 +23701,14 @@ packages:
     engines: {node: '>=14.18.0', npm: '>=8.0.0'}
     hasBin: true
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
 
   /rollup@3.28.0:
     resolution: {integrity: sha512-d7zhvo1OUY2SXSM6pfNjgD5+d0Nz87CUp4mt8l/GgVP3oBsPwzNvSzyu1me6BSG9JIgWNTVcafIXBIyM8yQ3yw==}
     engines: {node: '>=14.18.0', npm: '>=8.0.0'}
     hasBin: true
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: true
 
   /rrweb-cssom@0.6.0:
@@ -26563,7 +26571,7 @@ packages:
       rollup: 3.21.0
       sass: 1.55.0
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
 
   /vite@4.3.9(@types/node@18.16.9)(less@4.1.3)(sass@1.55.0):
     resolution: {integrity: sha512-qsTNZjO9NoJNW7KnOrgYwczm0WctJ8m/yqYAMAK9Lxt4SoySUfS5S8ia9K7JHpa3KEeMfyF8LoJ3c5NeBJy6pg==}
@@ -26597,7 +26605,7 @@ packages:
       rollup: 3.21.0
       sass: 1.55.0
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: false
 
   /vite@4.4.7(@types/node@18.16.9)(less@4.1.3)(sass@1.64.1)(terser@5.19.2):
@@ -26636,7 +26644,7 @@ packages:
       sass: 1.64.1
       terser: 5.19.2
     optionalDependencies:
-      fsevents: 2.3.2
+      fsevents: 2.3.3
     dev: true
 
   /vitest@0.32.0(less@4.1.3)(sass@1.55.0):