Chapter 40: Artificial Intelligence: OpenAI, 2012–2015

This chapter traces Elon Musk's relationship with Gwynne Shotwell, SpaceX's president and one of his longest-serving collaborators, and recounts SpaceX's early battles to win NASA contracts and pioneer fixed-price contracting in the aerospace industry.

Gwynne Shotwell joined SpaceX in 2002 as its seventh employee after a chance meeting with Hans Koenigsmann, who was being recruited as the company's fourth employee. A Northwestern-trained engineer with experience at Chrysler and Microcosm, Shotwell impressed Musk with her blunt assessment that SpaceX's sales approach was flawed. She became vice president of business development and has remained Musk's closest professional partner for over twenty years, sitting in a cubicle next to him at SpaceX headquarters. Her success working with Musk stems partly from her background—her husband has Asperger's syndrome, giving her insight into how Musk processes social interaction as analysis rather than emotion. She can push back against his excesses without triggering defensiveness, functioning as both peer and subordinate while also managing interpersonal damage from his blunt communication style. In late 2003, Shotwell and Musk traveled to Washington to pitch the Defense Department and won SpaceX's first contract for $3.5 million to launch TacSat satellites. To build public awareness, Musk brought a Falcon 1 rocket to the National Air and Space Museum in December 2003, impressing NASA administrator Sean O'Keefe and prompting deputy Liam Sarsfield to assess the startup favorably. However, when NASA awarded a $227 million no-bid contract to rival Kistler Aerospace in February 2004, Musk—despite Shotwell's advice against it—sued NASA, arguing the agency should promote innovation rather than bail out failing companies. SpaceX won the dispute, forcing competitive bidding and securing significant contracts. This victory proved pivotal because it challenged the government's traditional cost-plus contracting model, in which contractors received all costs plus guaranteed profit, eliminating incentives for efficiency or innovation. Musk advocated instead for fixed-price, outcomes-based contracts in which private companies controlled design and construction, risked their own capital, and profited only upon successful delivery of milestones. This approach became a model for how government contracts could be restructured.