USB storage device cannot be recognised in safe mode.
Please try the following steps:
Make sure that the USB storage device is properly inserted into the USB port on your PlayStation®4 console.
After inserting the USB storage device into your PS4™ console, wait about one minute and update again.
If the problem persists, initialise your USB storage device on PC, and download the update file from the system software update page, then put it in the specified folder and update again from the USB storage device.