Thursday, October 29, 2026 · 5 min read
Together with
America's antitrust officials are asking whether Nvidia, the biggest maker of AI chips, should be allowed to own Hugging Face too. That's the website where developers share the AI models those chips run.
Alphabet's cloud business doubled its sales last quarter, and the company still spent $9.1 billion more cash than it brought in.
Let Meerkat explain.
Nvidia, Hugging Face and the Justice Department
Alphabet's $9.1 billion cash gap
Ten companies, 40% of the S&P 500, in one chart
Amazon, Apple and the next Fed meeting
SCOREBOARD
NVIDIA | MICROSOFT | ALPHABET |
META | AMAZON | ORACLE |
S&P 500 | NASDAQ | VIX |
FED, WED 9 DEC: ~83% hike. CME FedWatch, via Fox Business after Wednesday's hold. Two Fed officials had already voted for a hike this week.
Wednesday close. S&P up 0.3%, with Oracle up 10.7%. On the week: Nvidia −3.0%, S&P −0.2%, Nasdaq −0.6%. Prices via CNBC.
ON WATCH
Nvidia's next buy, under review
The S&P 500 rose 0.3% on Wednesday, but Nvidia fell 1.2%. Reuters reported that the Justice Department is looking into its $12.9 billion deal to buy Hugging Face.
Hugging Face is where developers share and download AI models, a bit like an app store for the open side of AI. Nvidia, the biggest AI chipmaker, agreed to buy it in September.
Two people familiar with the inquiry say officials want to know whether owning it would hand Nvidia a crucial distribution channel for AI models and software.
The questions go past this one deal, into Nvidia's sales tactics, its investments and older purchases like Run:ai and SchedMD. Officials are also looking at allegations that customers got more chips if they bought Nvidia's networking gear and Groq processors too.
Nvidia and the Justice Department declined to comment, and an inquiry isn't proof of wrongdoing. To be fair, the wider investigation began under the Biden administration, long before this deal existed.
Jensen Huang also put a promise on the record in September: "Nvidia compute will not be required to build on or deploy through Hugging Face." The deal isn't due to close until the first half of 2027.
MEERKAT'S TAKE: Huang's promise is the right one, but for now it's a sentence in a press release. The version worth having is written into the deal's conditions, where a regulator can enforce it.
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THE MACHINE
Alphabet's $9 billion cash gap
Google Cloud more than doubled its sales last quarter, to $30.7 billion. Alphabet's shares still fell about 10% before the market opened on Thursday, on course for their biggest post-earnings drop ever.
Let Meerkat translate. Free cash flow is the money left after a company pays its bills and buys its equipment, and Alphabet's came out at minus $9.1 billion.
It spent $51.4 billion on data centres, chips and the like in three months, more than double a year earlier. It kept its plan to spend $195 billion to $205 billion this year and expects a significant increase in 2027.
Search, the business that pays for most of this, grew 12%, short of the 15% analysts expected. Alphabet covered the gap with about $29 billion of new borrowing, net of repayments.
Then again, the money is buying something customers want. Cloud profit more than tripled to $11.1 billion, and Sundar Pichai says there's "huge demand" for more capacity.
QUICK PAUSE. WHY SHOULD YOU CARE? When the richest AI builder borrows to keep building, its debt competes with everyone else's for the same lenders. Alphabet says more detail on next year's spending comes with its fourth-quarter results in early 2027.
SOMEONE SMART SAID
Catastrophically vulnerable at the slightest slowdown in growth or a market downturn.
Burry, who bet against US housing before 2008, went through Anthropic's IPO filing on his Substack. He counted about $537 billion of computing and equipment commitments, against sales running at about $65 billion a year.
His worry is the loop. The same tech giants are Anthropic's investors, lenders, chip suppliers and sales partners, and many of the contracts are take-or-pay, owed whether or not the computing gets used.
The counter is that Anthropic's sales still grew about 45% in the third quarter by his own count, and those commitments stretch over years. Burry says the filing holds "nothing that changes my view."
THE CHART
Ten stocks, 40% of the S&P
Top 10 companies' share of the S&P 500, 2000 to 2026 (RBC and Apollo estimates)
The ten biggest companies in the S&P 500 now make up about 40% of it, up from about 27% at the top of the 2000 dot-com boom. Most of them are AI spenders or AI sellers.
Four of them report results inside six days, from Wednesday's pair to Apple on Monday, so a few evenings can move the whole index. An S&P 500 index fund puts about two dollars in every five into those ten.
In fairness, the spending is turning into sales. Microsoft's Azure cloud revenue grew 48% last quarter, ahead of forecasts.
WHAT TO WATCH: Amazon reports after Thursday's close. If its cloud sales grow faster than its spending, the top ten look sturdier. If spending races ahead again, the same cash question lands on a second giant.
HEADS UP
China's labs reportedly trained on OpenAI's Astra · The Information says DeepSeek and Moonshot used GPT-6 Astra's answers to build their newest models. Reuters couldn't verify it, and neither lab responded.
Anthropic paid $2.75 million to guard Dario Amodei · The IPO filing shows his 2025 security bill was more than four times his base salary, which the board put down to heightened security concerns.
Australia moves against chatbots that bond with kids · Its lower house passed a bill barring chatbots from faking emotional closeness with under-18s, with fines up to about A$109 million. The Senate votes next.
Samsung tops 100 trillion won in a quarter · That's about $80 billion of operating profit, almost all from memory chips sold into the AI build-out. The shares slipped anyway.
The Fed holds, but two officials wanted a hike · Lisa Cook and Beth Hammack voted to raise rates on Wednesday. Futures now lean towards a December rise.
ON THE HORIZON
When (ET) | What |
|---|---|
Thu 29 Oct · after close | Amazon results |
Mon 2 Nov · after close | Apple results |
Tue 3 Nov | US midterm elections; JOLTS job openings 10am; AMD results after close |
Wed 9 Dec · 2:00pm | Next Fed rate decision |
MEERKAT ON YOUTUBE
The Microsoft Situation Is a Total Sh*tshow... Microsoft keeps saying it switched on a gigawatt of AI computing. Meerkat goes through reporting that only about a sixth of its capacity is AI, with billions of dollars of chips sitting in boxes it can't plug in. Watch on Meerkat Explains.
THE BURROW
Quick vote. Nvidia wants to buy Hugging Face, the site where developers share AI models. Should the US let it?
Nvidia wants to buy Hugging Face, the site where developers share AI models. Should the US let it?
Trivia. Nvidia's first product, launched in 1995, was a PC graphics card that flopped partly because it drew shapes with curves instead of triangles. What was it called? Answer's at the bottom of the email. No peeking.
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HOW DID WE DO?
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How did Meerkat do today?
Amazon reports after tonight's close. If its cloud numbers rhyme with Alphabet's, Friday's issue writes itself.
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Meerkat is not a financial adviser, and nothing here is advice. Meerkat is a small animal with a whiteboard and a pinky promise on a napkin. Please do not sue Meerkat.
TRIVIA ANSWER
The NV1. Nvidia's 1995 card bet on curved surfaces just as the industry settled on triangles, and its flop nearly sank the company.