Trump Plans Shutdown Job Cuts, OpenAI Valuation Soars to $500 Billion

0:00The 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 costs 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 smarter business, IBM. Bloomberg Audio Studios. Podcasts, Radio, News. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the fallout from the government shutdown.

0:48The Trump administration is planning to use it to fire federal workers this week. Bloomberg's Amy Morris is in Washington with the latest. White House Budget Director Russell Vogt is planning to swiftly dismiss federal workers, a sign that Republicans are leaning into hardball tactics to pressure Democrats to cave to end the shutdown. Sources tell Bloomberg Vote told House lawmakers some federal agencies will start terminating workers this week. Vice President J.D. Vance at the White House. If this thing drags on for another few days or, God forbid, another few weeks, we are going to have to lay people off.

1:22We're going to have to save money in some places so the essential services don't get turned off in other places. Vance says the administration isn't targeting agencies based on politics. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. Meanwhile, the Trump administration has also halted$18 billion in federal funding for infrastructure projects in New York City. Budget director Vogt cited concerns over diversity and equity policies, but President Trump had warned he would use the shutdown to target, quote, Democrat things. And Nathan, that could include projects in the energy space.

1:55This vote also said he will cancel$8 billion earmarked for renewable energy projects in more than a dozen states that voted for Kamala Harris in the 2024 presidential election, including hydrogen projects in California and the Pacific Northwest. And with the government shutdown, Karen, the Bureau of Labor Statistics won't be releasing key economic data that the Fed keeps a close eye on. That includes tomorrow's September jobs report. Chicago Fed President Austin Goolsbee speaking to American public media says a lack of official government data makes it harder for central bankers to interpret the economy.

2:31I consider the Bureau of Labor Statistics job data to be the absolutely best data source on jobs and statistics in the entire world. If we aren't going to have those, it's problematic. Chicago Fed President Austin Goolsbee also reiterated concerns about a recent pickup in services inflation. Well, Nathan, the Supreme Court is refusing to allow President Trump to immediately fire Federal Reserve Governor Lisa Cook. It means Cook can remain in her position until at least January when judges are due to hear arguments in her case. Bloomberg's Michael McKee says the delay marks a long postponement by the court.

3:10One reason may be that they are taking up the case of the FTC commissioner that the president is trying to fire, whom the court allowed to be fired. But they're going to hear arguments in that case in December. And because some of these previous cases have involved the Federal Reserve and the court has suggested there may be some slack given to the Fed that isn't given to these other agencies. And Bloomberg's Michael McKean knows that the Supreme Court decision means Cook will continue to vote on interest rate decisions. White House Press Secretary Caroline Leavitt says President Trump was well within his legal authority to fire Cook.

3:48Let's turn to tech news now, Karen. OpenAI has completed a share sale that makes it the most valuable startup in the world, surpassing Elon Musk's SpaceX. Sources tell Bloomberg that current and former employees of OpenAI sold roughly$6.6 billion worth of shares to a group of investors at a record$500 billion valuation. Peter Elstrom is Bloomberg's executive editor for Global Tech. That is a big accomplishment for a startup that still is losing lots of money, still has to prove that it has a business model behind this, but it's a big step up, especially because the valuation is going up to$500 billion from$300 billion just earlier this year when SoftBank led a round of financing in the company.

4:31Bloomberg's Peter Elstrom reports OpenAI is locked in an increasingly bitter fight for top AI engineers, and the share sale is seen as one way to offer an incentive for them who stay. Well, to geopolitics now, Nathan. President Trump says he will be meeting with Chinese President Xi in a month, and that soybeans will be a major topic of discussion. Bloomberg's Stephen Engels says the president's using social media to accuse China of hurting American soybean farmers. Trump is becoming increasingly concerned by the unrest, if you will, by U.S. farmers. Because keep in mind, you know, traditionally in the past decade or so, anywhere between 28 to upwards of 60 percent of U.S.

5:12soybean crops, which is underway, by the way, the harvest is underway right now, go to China. Bloomberg Stephen Engel adds that the president announced he plans to use a small portion of tariff revenue to help farmers. In the Middle East, Karen, Arab and Muslim leaders are pushing Hamas to accept the 20-point peace plan for Gaza that President Trump announced this week. One senior official told Bloomberg it's important to focus on what he called wins in the plan, including an end to the displacement of Gazans. The source also says the aim of a full Israeli withdrawal is a significant achievement.

5:46Qatar's foreign ministry says Hamas is preparing its response to the plan. We go to developments now in the war in Ukraine. Nathan, multiple reports say the U.S. will provide Ukraine with intelligence for long-range missile strikes on Russia's energy infrastructure and that the Trump administration is considering sending Kiev more powerful weapons. Ukrainian President Volodymyr Zelensky spoke this morning about the request for long-range Tomahawk missiles from the U.S. We are very thankful to President Trump for this dialogue. Last time we had a very good meeting, very productive dialogue, and we spoke about a long-range missile.

6:27Everything depends on his decision. Ukraine's President Volodymyr Zelensky was speaking in Copenhagen to take part in the European Political Community Summit. On Wall Street, Karen's stocks climbed to a record on the first day of fourth quarter trading. The Dow, S &P and Nasdaq all hit record highs. As equities rally, so does gold. Goldman Sachs strategists are saying this morning there's room for bullion to rally even more. The firm says interest from private investors presents large upside risk to their forecast of$4 ,300 an ounce by the end of 2026. This morning, Comex Gold is trading at$38.99.

7:04We have a note in big tech this morning as well, Nathan. Apple pausing a planned overhaul of its Vision Pro headset to focus on developing smart glasses that can rival Meta's products. It's working on at least two types of smart glasses, including one that will pair with an iPhone and another with a display that could challenge Meta's Ray-Ban display. Apple's glasses will rely heavily on voice interaction and artificial intelligence. And Karen Citigroup is now the main home of President Trump's money after years of getting shunned by major banks. Bloomberg News has learned the relationship began after CEO Jane Frazier congratulated the president on his second term win.

7:42The president's wealth has surged in recent years, driving up potential revenue for his bankers. Financial firms were previously unwilling to take on the president's wealth after past failures to repay loans tied to troubled business dealings.

7:57Time 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 Monica Ricks. Monica, good morning. Hey, good morning, Karen. The United Nations says it's now closely monitoring a global flotilla that was intercepted by the Israeli Navy yesterday as it was sailing to deliver some much needed aid to Palestinians in Gaza. UN spokesperson Stefan Djarik. We're obviously following the flotilla very closely. We just we do not want anyone to get hurt and we want people's rights to be respected. That flotilla included nearly 50 boats and 500 activists, including Greta Thunberg and Nelson Mandela's grandson.

8:34Meantime, Israel's defense minister has ordered all remaining Palestinians to leave Gaza City immediately, saying anyone who stays will be considered a militant supporter and face the full force of Israel's latest offensive. The call coming as Hamas weighs a potential peace deal from President Trump to end the war and return remaining hostages. Officials expect the death toll to keep rising in the Philippines as rescuers there use backhoes and sniffer dogs to sift through rubble collapsed buildings for survivors of a powerful earthquake. At least 72 people have died so far, and destruction and rain is hampering rescue efforts.

9:12Two Delta planes clipped each other overnight at New York's LaGuardia Airport. You guys did clip, correct? Yeah, we did. Their right wing clipped our nose. That sound courtesy of liveairtrafficcontrol.net. One of the planes had just landed. The other was preparing for departure, and one of the plane's wings hit the other's nose. One person was hurt, a flight attendant who apparently suffered a knee injury. TSA's warning your travel plans could be impacted by the government shutdown with more delays and cancellations amid staffing shortages. This traveler's worried about service in Ohio. You can only ask people to do so much, genuinely.

9:50Even if a service is very important, people are only going to do things out of the goodness of their heart for so long. Passport processing remains mostly unaffected. And renowned conservationist Jane Goodall has died. She was known for her groundbreaking chimpanzee field research and globe-spanning environmental advocacy. She was 91. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Monica Ricks and this is Bloomberg. Karen, Nathan? All right, Monica, thank you. Thanks, Monica. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen.

10:23It'll be quite a day in baseball. There are three decisive Game 3s in the wildcard playoffs. The Tigers and Guardians in Cleveland where The Guardians stayed alive, winning 6-1. Padres and Cubs at Wrigley Field. San Diego won game 2-3-0. Red Sox and Yankees in New York. The Yanks stayed alive, winning 4-3. One series did end. The Dodgers beat the Reds 8-4. The Dodgers will now play the Phillies. Brian Snitker will not return as manager of the Atlanta Braves, a job he had the past decade. He'll remain as an advisor. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

10:56As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more.

11:17Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. Now more than 24 hours into the federal government shutdown, the White House says the first layoffs could begin in the next one to two days. It may be a sign the Republicans are ready to play hardball to get Democrats to cave, but Vice President J.D. Vance says they'll have little choice if this goes on much longer. We are going to have to lay some people off if the shutdown continues. We don't like that. We don't necessarily want to do it, but we're going to do what we have to to keep the American people's essential services continuing to run.

11:57And that was Vice President J.D. Vance at the White House. For more, we're joined by Bloomberg News Editor Alexander Pearson. And Alex, I mean, they do have a choice technically, don't they? I mean, in the past, there have been temporary furloughs of federal workers. So what is the strategy here? Good morning. Good morning, Nathan. Yeah, that's right. Previously, during government shutdowns like this, federal workers would be furloughed. They wouldn't get any payment. And then when the government reopened, they would basically all be taken back and would get back pay. And what the administration is doing here is sort of escalating the shutdown fight by threatening to fire a lot of these non-essential workers.

12:37And that's been very much signal in the last few days that that's where they will head if the Democrats don't crack and try to, you know, don't agree to pass a stopgap measure to reopen the government. So it's definitely an escalation by the White House in terms of this shutdown fight. Well, they're saying that the layoffs are going to happen in the next day or two. Are we seeing signs in federal agencies that that is already starting to happen, that those preparations are taking place? So, yeah, the Office of Management and Budget sent a memo late last week asking for the agencies to draw up plans for who would be fired under this contingency.

13:18There's no indication yet that they've actually started to implement any of those plans, and there's still not been any reporting and certainly no announcement of which agencies would be affected, what the scopes of the cuts would be. At the moment, it's still very much the White House signaling that they're going to go ahead without giving details of what they actually plan to do. And in the meantime, we've already seen the White House budget director talk about cutting billions of dollars in New York City infrastructure spending, as well as green energy projects in other states led by Democrats.

13:49Is this all part of the pressure campaign as well? That's certainly how it's being read, you know, by in amongst those journalists and also by the Democrats. It's interesting to note that these sort of attacks on in terms of suspending infrastructure funds in New York and also canceling hydrogen projects on the West Coast, they're very much targeting, you know, Democrat leading states, states that voted for Kamala Harris in 2024. And so naturally, the reaction by the Democrats in those states has been to call it out as political payback as a way of pressuring the Democrats to fold in the shutdown fight.

14:27Although it's interesting to note that the White House itself has not made that link. They are claiming that, you know, that these funds are not necessarily being used correctly and that they're probing, you know, whether there is compliance there. But it's certainly being read as a way of putting Democrats under pressure. So in our last 30 seconds, Alex, are we seeing any signs that that pressure is being brought to bear on Democrats, that they could be wavering in their determination to push these health care cuts? Among leadership, no. They've at least publicly remained very steadfast in their position to agreeing to any kind of deal to reopen the government without their demands being met.

15:10But there are some moderate Democrats in the Senate who have been talking with moderate Republicans about maybe some sort of deal that they could get through to fund the government for a very short amount of time while they negotiate on Democrat demands. But it's not really clear at this point whether they're going to get anywhere with that. Like I said, it's certain moderate Democrats, and the wider party seems to be steadfast in some position. 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.

15:44Eastern 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 99.1 in Washington, Bloomberg 92.9 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 to stay informed all day long. I'm Karen Moscow.

16:21And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.