Elon Musk & Gwynne Shotwell on AI Risks and Peer Review, Starship, Terafab, SpaceX/Tesla Merger

All-In with Chamath, Jason, Sacks & Friedberg

In this episode of All-In with Chamath, Jason, Sacks & Friedberg, Gwynne Shotwell, President and COO of SpaceX, joins the hosts alongside El

Key takeaways

• SpaceX was born out of industry inefficiencies and post-9/11 military needs, not just visionary ambition.
• AI is now central to SpaceX's operations, with future rockets expected to be designed entirely by AI systems.

Main topics

• SpaceX's early history and business development strategy
• AI integration in rocket design and space operations

Notable quotes

"Fail fast, learn fast, make your design robust."

"If you're not leading AI, you run the risk of being irrelevant."

Conclusion

Elon Musk and Gwynne Shotwell present a vision where AI is not only essential but

Transcript preview

Speaker 3 (0:03) Quick question, what's our latest timeline on getting to Mars? Speaker 1 (0:06) Getting to Mars? Oh, I think we'll put people down within a decade. Welcome Gwen Shotwell, the president and COO of SpaceX. Speaker 6 (0:12) She's an instrumental, a really crucial person to the success of SpaceX. She's really the glue. You know, she's the glue to the tornado. Speaker 1 (0:20) Fail fast, learn fast, make your design robust. I would be disappointed if we didn't have... A settlement on the moon. The Speaker 6 (0:27) space and AI firm has officially made history on its $75 billion IPO, debuting with a market value of $1.7 trillion. The Speaker 1 (0:36) most efficient place to put it for its compute is on orbit. Manage risk, don't avoid it. Speaker 7 (0:42) Please welcome Gwen Shotwell. Hey. Thank you so much for coming. You're right here. Right there. Speaker 5 (1:00) Right on this couch. Welcome. Speaker 7 (1:02) Thank you. Thanks for being Speaker 4 (1:03) here. Speaker 7 (1:03) It's good to Speaker 1 (1:04) be here. Nice to see Speaker 5 (1:05) you. Speaker 1 (1:05) Nice to see you. Speaker 4 (1:07) Well, we really appreciate you coming out. How's it going at SpaceX? Speaker 1 (1:12) You know, we're bored. There's nothing going on. Not Speaker 4 (1:16) a lot happening. I've Speaker 1 (1:17) got all the time in the world. Elon has more time, by the way. Speaker 7 (1:20) Yeah, I mean, you've been at SpaceX forever. Are you the longest tenured employee after Elon? Speaker 1 (1:27) After Elon, yeah. In fact, my 24th anniversary was the 9th of September last week. Sometime. Wow. Yeah. That is extraordinary. Speaker 5 (1:37) Bruno, can you take us back to the day where you initially get this call and you're like, hey, there's this thing. What does the arc of the decision look like? And how did you get convinced to underwrite this business? Just walk us through that. Speaker 1 (1:54) Okay, well, Elon underwrote it, right? I just worked there. Speaker 5 (1:57) But Speaker 1 (1:57) the story is a little crazy, actually. So I was going out to lunch. One of my best friends who I was working with was going to go work for Elon. And I took him out to lunch, kind of a going away lunch. And he's like, oh, when I dropped him back off, he said, oh, come on in and meet Elon. Like, ah, he's busy. You know, we don't need to do that. But we did it anyhow. And I met him. And I said, hey, I think you really need, I think you need a full-time person to run your business development shop. You know, you've got... kind of a part-timer. He's a contractor. You know, it's not a great look. And he looked at me very thoughtfully and, you know, kind of scratched his head. And then we said goodbye, chatted a little bit, said goodbye. And then I got back to my office and I got a call from Elon's assistant, Mary Beth. And she said, Elon wants you to apply for the new vice president of business development position. Can you come interview? I'm like, now? No, I have a job. I can't go now. Tomorrow? Okay, sure, tomorrow. And then it took me like four weeks to decide, yes, I was being a total idiot. Speaker 5 (3:02) But at the time, what was the scale of that business? What did you think it needed that it didn't have? Because it was still very much an R &D. It Speaker 1 (3:09) was very R &D, but Elon had an investment and he wanted some return. He wanted cash, right? He wanted customers. And I was doing that work anyhow in the space industry. Turned out I was pretty good at it. Speaker 1 (3:25) But yeah, so what did it look like? I was the seventh employee to sign my contract. I gave two weeks notice and took a week off to remodel a bathroom because I knew I would never have time to do it once I started working for Elon. Came three weeks later, employee number 11, and we just got to it. And we sold a rocket about 12 months later Speaker 5 (3:46) without a rocket. Speaker 1 (3:49) There wasn't a rocket. There Speaker 5 (3:50) wasn't a rocket, yeah. So what does that sales cycle look like? How do you convince somebody? that they can actually take that risk and maybe give you the deposit you need to start the cycle to build the thing. Speaker 1 (4:00) So the timing was great. By the way, SpaceX should never have existed, right? If the other launch providers were great, then a new entrant can't make headway, right? Because they were so entrenched. So we should have never made it. But it turns out... Customer service wasn't great. Rockets were incredibly expensive. And so there was that piece, right? And then the other piece was 9-11. At that time, the military was desperately looking for someone who could come in and do rapid launch. They kind of knew where the bad guys were for about four hours after the events of 9-11, and they really wanted to be able to get some capability in theater. Speaker 1 (4:45) It took us a while to do it, but we did what we said we were going to do. So Speaker 5 (4:49) it really was sort of like out of tragedy, this opportunity gets born. To some Speaker 1 (4:52) extent, yeah. Speaker 5 (4:53) And it Speaker 1 (4:54) wasn't specific to SpaceX. It was just the state of the industry at the time. Speaker 5 (4:58) And then obviously, you know, very, very famous first chapter where you guys get almost to the brink and you need this last launch to work. Speaker 5 (5:08) Your role started to evolve pretty meaningfully by that point. So can you walk us through, like, what was the internal dynamics of that business that kind of, like, put you into that position? Speaker 1 (5:17) So it was very startup-y. I was the sales lady. But then when you have sales, you need, you know, to manage your customers and you need a finance function. And even though we were little, and I think one of the defense contractors at the time said they're a fly on my... you know, on a giant, on my big toe or something. I was like, well, I don't think you should have flies on your toes. But you still need a government affairs function. You need to defend yourself. We never go on the offensive in Washington. We're always in defense mode. So I just kept taking on more and more. And then when we were getting our largest contract at the time, it was the cargo resupply contract. We call it CRS. And this was 2008. Speaker 1 (6:03) And Elon was super busy with Tesla, quite busy at SpaceX as well. There was a lot going on, and he needed a partner at the time. And I think he was trying to pick Gwynn on this side or maybe one of the other guys who had kind of taken on, gobbled up more technical scope. And he asked me to do it on our way to our final negotiations for this $1.6 billion contract with NASA on the runway. He's like, hey, do you want to be president? Speaker 5 (6:29) I was like... Do I? Speaker 1 (6:31) Well, no. Not initially. For like that nanosecond. Like, well, I love my job. I love the guys, my teammates. And then it's like, okay, I'm being an idiot again. Yes, I want the job. Speaker 5 (6:44) So now fast forward maybe just to come to where we are today. Speaker 5 (6:49) The scope and the ambition of this business has expanded dramatically. I mean, it almost seems in like the last year. It's as much an AI business as it is a space business. I think Elon may have said that. I don't know if it leaked or they said it out loud about the scale. In Speaker 1 (7:05) fact, Speaker 5 (7:05) by Speaker 1 (7:05) revenue. Speaker 5 (7:05) By revenue, yeah. How do you manage now the culture of these two different businesses now that have to sort of sit under this roof and ideally work together and complement each other? Speaker 1 (7:17) So the team, you know, there's been a lot of churn at XAI for sure. And SpaceXers have kind of marched in and helped out where there were significant gaps in that arena. And we were all really excited to learn about AI. I mean, I'm an AI noob. And we have a bunch of folks that were just really excited about it. And I think we all recognize Elon set the stage beautifully as he does. That, you know, if you're not... Using AI, if you're not leading AI, you run the risk, significant risk of being irrelevant. And there was no way that SpaceX was going to be irrelevant, right? It's too important to the company and the work we're doing is too important. Do you Speaker 5 (8:06) expect that the future generations of rockets will be increasingly more and more informed, built, designed? 100 Speaker 1 (8:15) % by AI. By these systems, yeah. Speaker 5 (8:17) Yes. And how do you manage the team? You know, because you have like these incredible, I mean, literally rocket scientists, they've trained their whole lives in a way. And now you have to help them on board to a tool chain and be comfortable with sort of what that means. Like, I don't know if you saw, for example, that all these mathematicians got really upset when I think it was OpenAI solved this very famous equation. Oh, the Speaker 1 (8:41) Navier-Stokes equation. Yeah, I read about that. Speaker 5 (8:43) Well, there's Speaker 1 (8:43) some debate on whether they... Speaker 5 (8:45) They brute-forced the solution, but then these 20 field medalists essentially said, hey, you're ruining the craft. Now, Speaker 4 (8:51) I don't think that that's... You're taking away the medals. Speaker 5 (8:53) Yeah. Speaker 1 (8:53) They're Speaker 5 (8:53) going to take them, exactly. Speaker 4 (8:55) Like, that's the career. It's not about making stuff. It's about getting awards. And now all of the awards are gone. Speaker 1 (9:01) Yeah. And I'd rather just have the world be a better place, a smarter place, us being better informed and solving problems than worrying about that. Make more stuff. Yeah. Make more stuff. Speaker 4 (9:12) What's the cultural merger been like? You've got XAI, you've got X, I don't know how many people are involved in X itself, SpaceX. I mean, are these differently managed businesses? How do you run management there? Do people kind of, are they pretty fluid amongst the units? Do you think about them as units or how do you actually manage this? Speaker 1 (9:31) So I would say we are not fully, fully integrated yet. And then we just did the cursor, you know, situation. Congratulations on that. Speaker 7 (9:38) What a purchase that was. Speaker 1 (9:39) Yeah, yeah, yeah. They're great. They're great. We just closed that, I think, a month ago today, actually. Yeah, so we're not fully integrated yet, but we... Speaker 1 (9:51) I think the teams are gelling really well. Very kind of different verticals, but again, because of the turn that we had at XAI, so much SpaceX leadership and engineering went into that, basically went in there. We're getting integrated faster than I thought. It's probably not as fast as Elon wants it. One of the things that strikes Speaker 4 (10:12) me is the scale and the number of capital projects you have that you have to manage probably... more capital projects that are more different from one another than any other organization. It's Speaker 5 (10:23) a Speaker 4 (10:23) scale Speaker 5 (10:23) of a country. Speaker 4 (10:24) No, I mean, it has to be. And so I think about this Louisiana spaceport. You've got Starship, which is the most ambitious aeronautical project of all time. You've got TerraFab, which I think is one of the most inspiring and ambitious projects of all time in humanity. I mean, TerraFab is so incredible in its vision. and the scale and what you're envisioning to do there. And then I start doing back of the envelope math. I think I had a couple beers and I was talking with someone about TerraFab and I'm like, holy shit. Those numbers get very big, very fast. Very big. Although the AI Speaker 1 (11:00) numbers are Speaker 4 (11:02) also... I Speaker 1 (11:03) used to be horrified at our expenditures before the XAI acquisition. It's like, oh Speaker 5 (11:09) my... Speaker 1 (11:09) We're going to spend $100 million on an air separation unit. And I was like, oh, $100 million, a billion. Speaker 4 (11:18) When you look at the kind of schedule of all of this over the next few years, does the capital for that sit on the balance sheet? Is it going to come from cash flows, from Starlink? Or do you have to go back to the markets to get more capital? I mean, how do you think about where the capital comes from? I don't think anyone doubts the capacity to execute and deliver. Or some people might, but I think generally the markets will say yes. But where does that capital come from? Speaker 1 (11:42) So it will come from, I would say the answer to the above is yes. I don't think we're going to release any more stock. And by the way, I don't plan on making any news on this. That's like the one downside of a public company. They told me all the things that I couldn't say. And I'm like, I'm going to forget one for sure. Maybe we're going to make some news. But it will be all of the above. Speaker 4 (12:08) And Starlink, I mean, is Starlink, in your view, kind of the core cash generation engine for the next couple of years for the business? Or is it compute? Or is it a mix, again, of all the above? Like, how do you think about... So Speaker 1 (12:20) Starlink is definitely carrying its own weight, but we have a lot to go, right? Our market penetration on Starlink is 1.5 % to 2%, depending on which country you're in. So there's a lot of headroom there. Our revenue, compared to what we do for the U.S. military, our revenue is very small. So we expect lots of headroom there. But honestly, right now, and it is a little embarrassing, but computer rental is a heck of a business. Does Speaker 4 (12:47) that persist, Speaker 1 (12:48) do you think? We don't see any drop. We see no drop in demand at all. This is Speaker 7 (12:54) tens of... billions of dollars per quarter in build out. And these are a new customer base for you. Is this the business now? Is this like, what percentage of the revenue is Elon Web Services? It's Speaker 5 (13:11) a Speaker 1 (13:11) lot. It's a lot. I think we'll probably do some announcement quickly. Oh, right. Public again. Yeah, public. Speaker 7 (13:18) Let's move on to something less controversial then. What other companies are you planning on buying? Speaker 1 (13:24) Good one. Yes. Good one. You know, we almost know M &A. You Speaker 4 (13:28) like electric cars? Speaker 7 (13:32) Have I Speaker 1 (13:32) got a deal for you? I have a bunch. Batteries, electric cars. Starlink on OptiMai. I'll Speaker 5 (13:39) get you a good price. Can Speaker 1 (13:40) we talk Speaker 5 (13:40) about a deal that you did close, which is you did a great deal with Echo Star. Yes. And Charlie had a bunch of spectrum that you guys were able to acquire. And I think everybody started to ask the question, wow. There's a direct-to-sell business. Yes. And what's the natural thing after that would be sort of like a broad-based, more mobile phone service. But can you just, what you can tell us? Where's that spectrum going to be used for? What's your short-term plan on what the Starlink and direct-to-sell business looks like? Speaker 1 (14:10) Well, we have a direct-to-sell business right now through T-Mobile. I don't think they provision all their users with it, just the people that pay the most. But our plan is to leverage instead of slices of T-Mobile spectrum or slices of other teleco spectrum across the globe, we want to leverage the one that we paid a lot of money for. And with the stock increasing in price, it paid more because there was some stock involved there. So Charlie did all