Red Hat acquires Neural Magic to boost AI portfolio

Red Hat has announced the acquisition of Neural Magic, a company known for its software and algorithms enhancing generative artificial intelligence (AI) workloads.

This acquisition aligns with Red Hat's goal to make generative AI more accessible to organisations, aiming to deliver AI applications across hybrid cloud infrastructures. Red Hat, alongside the acquisition, introduced several AI innovations, including enhancements in AI-enabled application development through Red Hat Developer Hub and a new release of Red Hat OpenShift.

The decision to acquire Neural Magic is driven by the increasing size of large language models (LLMs), which require substantial computing power and technical expertise, making them difficult for many organisations to implement effectively. Red Hat plans to leverage its acquisition to provide open innovation opportunities through vLLM, a project initiated by UC Berkeley, aimed at supporting diverse hardware and boosting AI model inference acceleration.

Neural Magic's involvement with the vLLM project, combined with Red Hat's portfolio in hybrid cloud AI technologies, is intended to offer organisations a means to develop AI strategies that align with their specific needs.

Founded in 2018 as a spin-off from MIT, Neural Magic's expertise will aid Red Hat in advancing its AI technology portfolio. This includes offering open-source licensed models across a broad parameter range, enhancing security and operational efficiencies, and providing a flexible ecosystem for customer choice in AI deployment.

According to Neural Magic, the company builds enterprise-grade inference stacks that help customers optimise, deploy, and scale LLM workloads across hybrid cloud environments, maintaining control over their infrastructure and security policies.

Red Hat's AI objectives focus on reducing costs and skill barriers in AI technology, utilising platforms such as Red Hat Enterprise Linux AI, Red Hat OpenShift AI, and the InstructLab initiative, which is a collaboration with IBM to further develop open-source AI models.

Matt Hicks, President and CEO of Red Hat, stated, "AI workloads need to run wherever customer data lives across the hybrid cloud; this makes flexible, standardised, and open platforms and tools a necessity, as they enable organisations to select the environments, resources, and architectures that best align with their unique operational and data needs. We're thrilled to complement our hybrid cloud-focused AI portfolio with Neural Magic's groundbreaking AI innovation, furthering our drive to not only be the 'Red Hat' of open source, but the 'Red Hat' of AI as well."

Brian Stevens, CEO of Neural Magic, commented, "Open source has proven time and again to drive innovation through the power of community collaboration. At Neural Magic, we've assembled some of the industry's top talent in AI performance engineering with a singular mission of building open, cross-platform, ultra-efficient LLM serving capabilities. Joining Red Hat is not only a cultural match, but will benefit companies large and small in their AI transformation journeys."

Dario Gil, IBM Senior Vice President and Director of Research, added, "As our clients look to scale AI across their hybrid environments – virtualised, cloud-native LLMs built on open foundations will become the industry standard. Red Hat's leadership in open source combined with the choice of efficient, open source models like IBM Granite and Neural Magic's offerings for scaling AI across platforms empower businesses with the control and flexibility that they need to deploy AI across the enterprise."

The transaction is pending customary closing conditions and regulatory reviews.