Congress, Zuckerberg Address AI Dangers; EU Proposes Canada Membership

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1:01businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati Insurance make your bad day better. Find an independent agent at CINFIN.com This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner you started with a dream, to do what you love and watch it grow. What you probably didn't dream about, keeping up with cyber threats. That's where MasterCard can help, with access to tools that help identify cyber threats to better protect your business. Building a dream business, priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at mastercard.com slash small business. Bloomberg Audio Studios Podcasts Radio News Good morning. I'm Nathan Hager. And I'm Karen Moskow.

2:02Here are the stories we're following today. Karen, we begin in Washington where the debate over artificial intelligence safety is heating up. Sources tell Bloomberg Anthropics Top Executive in DC Tom Brown met virtually yesterday with Commerce Secretary Howard Ludnick and Pentagon Chief Tech Officer Emil Michael. Tensions between Anthropic and the Trump administration were revived over CEO Dario Amadez, 3,800 word essay calling for government guardrails for AI. President Trump is dismissing fears as a hoax. And House Speaker Mike Johnson says he agrees. We've all seen this movie before, okay? We're 49 days out from an election. A catastrophe is created. The media gets spun up. Social media gets spun up. Everybody says we're all going to be dead in ten years. House Speaker Mike Johnson spoke on Capitol Hill, but the issue has brought together some unexpected political bedfellows. Progressive Senator Bernie Sanders joined former Trump advisor Steve Bannon at a pro-human rally in Washington. If AI surpasses human intelligence, as many scientists believe could happen,

3:08this technology will escape human control with potentially catastrophic consequences. Independent Senator Bernie Sanders, the Pentagon's Emil Michael has publicly rejected claims AI will kill all humans and sources tell Bloomberg that Secretary Ludnick is eager to push back at the negative messaging ahead of the midterms. Nathan, several tech leaders are weighing in on the safety and future of AI and Bloomberg's John Tucker joins us with that part of the story. John Good Morning. Good morning, Karen. We're hearing from a metacetyl Mark Zuckerberg. He says artificial intelligence labs should rely on independent evaluators to ensure that models are safe. In video's Jensen Wong issued his opinion, he dismissed the need for new AI security regulations, arguing that market forces will help companies safely innovate. Now, to underscore some of the urgency of this debate, open AI says it is now working with its chief competitors, anthropic and Google deep-mind to address AI safety issues.

4:10Global policy chief for open AI says the company's engagement with anthropic and Google has been underway for several weeks. And open AI says it will support bipartisan proposals aimed at addressing potential catastrophic risks. I'm John Tucker Bloomberg Radio. John, thanks. And as the AI controversy heats up, open AI is holding early talks with investors about a fresh funding round that would value the chat GPT maker and more than $1.2 trillion. Open AI CEO Sam Altman recently told Fortune the company's long-anticipated initial public offering wouldn't happen this year, so to say the additional funding provides flexibility to push back the IPO until 2027. Let's turn to the economy. Now, Nathan, and what may be the most highly anticipated Fed decision in years, from Main Street to Wall Street to the White House, attention will be on new Fed chair, Kevin Warsh, and we get a preview of Bloomberg economic correspondent Michael McKee. Investors have priced in a quarter percentage point rate increase the first since 2023. What really matters, however, is what the Fed will do next.

5:16Don't expect much of a signal from Chair Kevin Warsh, who has made it clear he doesn't like guiding the markets. But there will be clues. Policymakers will offer their latest forecasts on growth and inflation. If the outlook for either strengthens, it underpins a case for further rate increases. And there's the dot plot. Will it show a majority anticipate another move this year, or in 2027? The current median dot for 2027 anticipates essentially no move. Finally, members will also update their view of the longer-term neutral rate. It's risen in 2026. Another move higher would signal, Fed officials don't think rates are restrictive enough to bring down inflation. Michael McKee, Bloomberg Radio. All right, Michael. Thank you. I'll stay with Bloomberg for a complete coverage of the Fed with a special edition of Bloomberg Surveillance. It starts at 1.30 pm Wall Street Time on Bloomberg Radio and Television and on the Bloomberg podcast YouTube page. Karen, we have a developing story out of Europe this morning. European Commission President Ursula Von Der Leyen is proposing that Canada become the first associate member of the European

6:20Union. Let's go to London and get the latest with Bloomberg's UNE parts, UNE. Nathan and Karen, Commission President Ursula Von Der Leyen says the European Union needs to urgently reimagine its partnerships and build global coalitions. She ended her annual state of the Union address with a surprise announcement. I would like to work with you on opening the door for Canada to being the first associate member of the European Union. As to exactly what associate membership of the European Union looks like, those details are yet to come. President Trump, a fan of neither Canada nor the European Union, will no doubt have a view. In London, I'm your own part's Bloomberg Radio. Are you in thanks now to the latest from the Middle East Saudi Arabia is ramping up crude oil sales from outside the straight-of-war moves with the East West pipeline shut down. The Kingdom was forced to close the conduit last week after multiple attacks and Bloomberg's owner Ant has more from Dubai. This is what Saudi Arabia was relying on to export much of its oil after the problems

7:24at the straight-of-war moves began in February and March. And now with the hoothy attacks, both on Saudi energy sites and hoothy's, including influence over the Babel Mandab, which is another critical choke point for global shipping. At the southern tip of the Red Sea are now putting at risk Saudi exports to the rest of the world. And Bloomberg's owner, Ant Reporters, is not clear when the pipeline can reopen. But traders tell Bloomberg that Saudi Aramco has sold about 20 million barrels this week to Asian refiners that can be picked up from just outside who are moved this month and next. Meanwhile, back in Washington, Karen, the House has voted for a third time to call on President Trump to end the war with Iran. Seven Republicans joined with all Democrats on the war power's resolution sponsored by Massachusetts Democrat Seth Molten. Republican Thomas Masi of Kentucky introduced his own resolution to impeach defense secretary Pete Hegseth. Every time we try to do something one way, they say we're not going to follow it. And I think the only way to stop this right now is to impeach Peter Hegseth.

8:26Congressman Thomas Masi spoke after the Congressional Budget Office released a new price tag on the war. It says the conflict cost about $38 billion in its first five months and will push up inflation about a half percentage point by early next year. Nathan FBI Director Cash Patel testified before the Senate Judiciary Committee where he confirmed that the FBI will send what he calls co-ordinators to polling sites in November. Bloomberg's Amy Morris reports from Washington. Patel would not rule out sending federal agents to polling places on election day saying that he's not sure the bureau is legally barred from doing so. Democratic Senator Peter Welch pushed back. Do you pledge that you will not in any way interfere in the will of the American people when they go to the polls in November? I pledge unequivocally that I will not participate in your charade of lies. Patel faced criticism from Democrats who accused him of using the bureau's law enforcement powers for political purposes. In Washington, Amy Morris Bloomberg Radio. Amy, thank you. The

9:28crypto industry has taken a setback on Capitol Hill. The Senate has failed to advance the clarity act denying the industry a chance to turn its newfound influence in Washington into fresh rules that could outlast the Trump administration. This means regulators like the Securities and Exchange Commission and commodity futures trading commission will continue to make crypto rules that could be easier for a future administration to change. And we want to introduce you to Ask Be Nathan. Bloomberg's conversational AI for company and markets research ask a question to analyze companies uncover trends and explore Bloomberg market intelligence alongside your firms of proprietary data. Type Ask Be Go on the Bloomberg terminal or tap the Ask Be icon in the mobile app. Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr, Michael Good Morning. Good morning, Karen. One month after the board of the Kennedy Center voted to add President Donald Trump's name to the venue. The board voted on Tuesday to immediately close the performing arts center's main building

10:31for renovations. The vote came after a federal judge blocked the board from adding a tribute to Trump on the building or site. Democratic congresswoman Joyce Beatty of Ohio, who is a former board member, has been fighting the change. Beatty told reporters she will take all legal steps to keep it the Kennedy Center adding it has been a quid pro quo for months. Every time there's an issue that comes up, it has been connected. We will consider it to this, but or unless it has Donald Trump's name on the building. President Trump says unless the Supreme Court overturns the judge's decision, the reconstruction and renovation of the Kennedy Center will not take place. Officials say an NBC news helicopter crashed in Los Angeles and killed at least three people. NBC4 confirmed that two people on the helicopter were killed and officials says one person outside in a parking lot was also killed. The helicopter was covering a fatal bus accident. Officials say two other people were killed and six others were injured after an SUV crashed into a

11:36city bus. Los Angeles mayor Karen Bass in the news conference Tuesday night. We lost five Angelinos today and my heart certainly go out to the family and friends of all of those that we lost. Mayor Bass called it heart breaking. Weeks after a mistrial was declared in the Lindsay Clancy case, Massachusetts is taking a closer look at the postpartum care offered to mothers. Yesterday, Governor Maura Healy announced a proposal to expand at home visits. To every mom who has struggled with her mental health before, during or after pregnancy, I want you to know we see you. I see you. Governor Healy wants the state legislature to approve another $2.25 million to add to the current welcome family program. Global news 24 hours a day and whenever you want it with Bloomberg News now, I'm Michael Barr and this is Bloomberg Karen. Thanks, Michael. Time now for our Bloomberg Sports Update and for that, we bring in John Staschauer. Thanks to the Milwaukee Brewers, NL Central James for the fourth year in a row. They clings for the

12:415-1 win at Pittsburgh, Jacob Misorowski with his 15th win of the year. Brewers will be playing in October and trying to give the World Series for the first time since 1982. Dodgers are three nothings shut out when at Cincinnati, Zia Shanovo, Yamamoto got his 14th win. Seven innings allowed only one hit. Miles Stone Home run for Pete Alonzo, 300th of his career is balled the more beat the Metz Alonzo getting to 300 with a homer against his former team. That's your Bloomberg Sports Update. Stay with us, Samoa from Bloomberg, Dave Ray coming up after this. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced cost by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smart to business. IBM.

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15:55The fast building debate over artificial intelligence risk is now led to a high level conversation between the point man for anthropic in DC and the Trump administration. Some of the biggest names in the AI space are discussing the threat among themselves as well. Open AI CEO Sam Altman says he's taking the issue seriously. The world should trust that we are going to do the right thing because it's the right thing, and because we feel the magnitude of this. Open AI. Sam Altman spoke at the Salesforce Dreamforce conference in San Francisco. Joining us now is Bloomberg News Senior Strategist, Neil Campling. Neil, it's good to speak with you this morning. What is your sense of how seriously the industry is taking the warnings from the likes of now former AI researcher Jacob Cox and others? Good morning. I think you just think we said that former executive. So, I don't know these stories that are coming out from people who are leaving the AI companies.

17:01Is this because they're firing a miscivilism as they're leaving the building or are they leaving the building because they are concerned about the risks with the technology. It's not it's unsure at this stage. What we do know is clearly the AI developments are extremely quick and that also comes with increasing with increasing risks. We know that there are talks around guardrails. There are talks around hitting the brakes on AI development. Now, it creates a difficult situation but these technologies themselves are obviously fast growing, have substantial increases in their speeds. But they also require some forms of guardrails around them. But they also need to stay ahead of the Chinese competition. That's why I think the President Trump has come in with the miscivings against anthropics. See over the weekend. But there needs to be careful management of the tech development while staying ahead of competition.

18:05We heard that expressed as well in the now famous 3,800 word essay from anthropics CEO Dario Amade calling for guardrails. What's the balance that these companies need to strike deal? So, the balance part is that if we look at the Trump administration for one thing, the AI development that's feeding through into many parts of our economy is very productive for GDP. So, that's one side of things. So, we need to encourage the growth. We need to make sure that the US stays ahead as the ultimate leader of tech development as it has been for decades. So, we need to track carefully because Beijing is getting up the technology curve. China has narrowed that technology gap on AI. So, whilst you need to put in place if you like some of the guardrails as you say around this, it's interesting that say another leading tech

19:08CEO Zuckerberg met a he's saying that independent evaluators could help ensure that models are safe rather than being too restrictive. And by doing that perhaps we can then maintain that leadership position that the US enjoys today. Well, as the debate continues about potentially pacing development, it seems as though the pace of fundraising for these companies isn't really letting up. We're getting word that open AI is talking about a new funding round that could price it at $1.2 trillion in our last minute here. Does it seem like this debate will have any impact on that? Yeah, I think maybe what we're seeing now is that we're seeing perhaps a another fresh round of private capital raise as opposed to rushing the coming to market. Clearly, the tech developments are very expensive and need the funding. And I think there's still that we're looking at a valuation of $1.2 trillion is very supportive for the narrative here because we last looked at the last funding round, raising about a less than

20:12a trillion, about $9.65 billion valuation when it raised funds back in, back in May. So it's a good sort of headline number in terms of the potential market capital company, still need to raise the money and it's still investing at pace as all of the AI developers are. So that is definitely supportive for the AI narrative. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 991 in Washington, Bloomberg 929 in Boston and nationwide on Sirius XM channel 121. Plus listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it. In five minutes or less, search Bloomberg News Now on your favorite podcast platform

21:16to stay informed all day long. I'm Karen Moscow. And I'm Nathan Heygurr. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. If you listen to financial news, you know a lot of time is spent thinking about what's next. The next opportunity, the next investment, the next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati Insurance make your bad day better. Find an independent agent at CINFIN.com. As industries evolve faster than ever, companies need an environment that

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