TL;DRxAI’s general counsel warned staff to limit contact with Cursor employees weeks after the two teams began working together, raising gun-jumping antitrust concerns ahead of a potential $60 billion acquisition tied to SpaceX’s record IPO.
Elon Musk’s xAI has told employees to limit their contact with staff from Cursor , the AI coding startup that SpaceX has an option to acquire for $60 billion. The directive came from James Burnham, xAI’s general counsel and former chief lawyer at the Department of Government Efficiency, according to Bloomberg.
Burnham sent guidelines to xAI personnel last week instructing them that interactions with Cursor staff should not go beyond what is needed to carry out a technical partnership announced in April. That partnership allows the two companies to collaborate on computing resources and coding. It is legally separate from the potential acquisition.
The problem is timing. Cursor employees are already working inside xAI’s offices. The two teams have been collaborating on projects for weeks. The legal guidance that should have preceded that collaboration arrived after it was well under way.
US antitrust law prohibits what regulators call gun-jumping, the intermingling of assets or joint business decisions between merging companies before the deal receives approval from the Justice Department or Federal Trade Commission. Violations carry steep financial penalties and can delay or derail a transaction. Burnham’s email reminded staff that xAI and Cursor remain legally separate entities and must operate independently until the deal, if it proceeds, receives regulatory clearance.
