Red Hat acquires Neural Magic to boost AI capabilities

Red Hat has completed the acquisition of Neural Magic, a company known for its work in generative AI performance engineering and model optimisation, intending to enhance its AI offerings across hybrid cloud environments.

By incorporating Neural Magic's technology, Red Hat aims to deliver AI workloads that offer high performance and specificity tailored to customers' varied needs, ranging from data centres to edge deployments. The acquisition aligns with Red Hat's emphasis on open-source innovation and seeks to bolster the effective use of AI across diverse organisational schemas.

Matt Hicks, President and Chief Executive Officer of Red Hat, highlighted the value of integrating Neural Magic's expertise with Red Hat AI. He said: "By adding Neural Magic's expertise in gen AI performance engineering and optimisation to Red Hat AI, we're furthering our commitment to a gen AI that answers customers' unique needs, from where workloads run to how they are tuned and trained."

Large language models, while significant in current generative AI applications, often require substantial resources that many organisations find challenging to manage. Red Hat seeks to address these issues by promoting smaller, optimised, and open-source-licensed models, which it sees as crucial for the continued success of AI strategies within compute architectures and deployment environments.

Neural Magic is recognised for its dedication to creating optimised and efficient AI models, which supports Red Hat's vision for AI. Moreover, Neural Magic contributes to vLLM, an open source project from UC Berkeley focused on open model serving, promising wider accessibility and choice in the deployment of AI workloads.

Brian Stevens, Chief Executive Officer of Neural Magic, expressed enthusiasm about the collaboration, stating: "Neural Magic's research and technical contributions to open source AI have significantly reduced the infrastructure required to deploy state-of-the-art large language models at scale. Red Hat shares our vision that the Future of AI is Open, and we are looking forward to together enabling enterprises to capture the value of GenAI without all of the friction."

The integration of Neural Magic into Red Hat also aims to streamline enterprise AI adoption by leveraging open-source models that scale from one billion parameters to hundreds of billions. These models are designed to be deployable across the hybrid cloud, encompassing corporate data centres, various cloud services, and edge locations.

Dave McCarthy, Research Vice President of Cloud and Edge Services at IDC, acknowledged the strategic nature of this acquisition for Red Hat. "Red Hat's acquisition of Neural Magic is a strategic enhancement to its AI capabilities, facilitating AI deployment across hybrid clouds by leveraging Neural Magic's expertise in model optimisation and inference acceleration. This move not only aligns with Red Hat's commitment to open-source innovation but also positions the company to offer more cost-effective, scalable AI solutions that reduce dependency on specialised hardware."

Through this acquisition, Red Hat continues its drive for open source as a backbone of AI, part of which includes integrating Neural Magic's competencies into its AI offerings such as Red Hat Enterprise Linux AI and Red Hat OpenShift AI. These platforms focus on supporting enterprise applications and enabling rapid machine learning model development and deployment across diverse environments.

The assimilation of Neural Magic will form an integral component of Red Hat's AI platform offerings, projecting enhanced performance optimisation capabilities and further supporting the open-source community's collaborative efforts in AI development.