Investing.com -- Employees at Elon Musk’s xAI received instructions from the company’s general counsel to restrict their interactions with workers from Cursor, an AI coding startup that xAI may acquire, Bloomberg reported on Tuesday.

James Burnham, xAI’s general counsel, reportedly sent out guidelines to staff last week stating that contact with Cursor personnel should be limited to what is required for a technical partnership the companies announced in April. The partnership enables the two firms to work together on computing resources and coding but is separate from the potential acquisition.

The directive was issued on the same day SpaceX, xAI’s parent company, submitted paperwork for an initial public offering. XAI and Cursor remain legally separate entities and must continue independent operations until SpaceX completes any acquisition and receives regulatory approval, Burnham told staff.

The lawyers informed employees that their communications could be subject to subpoena during the regulatory review process, and any claims that the companies improperly combined their operations could threaten the deal.

According to SpaceX’s IPO filing from last week, the company holds the option to acquire Cursor during a 30-day period starting shortly after the its public listing. The April agreement gives SpaceX the right to purchase Cursor for $60 billion or pay a $10 billion breakup fee.

US antitrust regulations prevent merging companies from combining assets or making joint business decisions before review by the Justice Department or Federal Trade Commission. Violations can result in substantial financial penalties and delay deal closures.

The legal guidance arrives several weeks after xAI and Cursor staff began working together under the technical partnership.