Red Hat acquires Neural Magic to boost GenAI in hybrid cloud

Neural Magic’s expertise in generative AI performance engineering and model optimization will empower Red Hat AI, driving greater accessibility and feasibility in production AI.

Open source solutions provider Red Hat has completed its acquisition of Neural Magic, a company specializing in Artificial Intelligence and algorithms that accelerate Generative AI workloads. This strategic move strengthens Red Hat’s portfolio by integrating advanced capabilities in AI optimization and model performance engineering, addressing the growing demand for efficient and scalable Machine Learning solutions across the hybrid cloud.

Neural Magic’s expertise in optimizing large language models (LLMs) offers solutions to the challenges posed by the resource-intensive nature of GenAI. While LLMs power transformative applications, their high costs often limit adoption. Red Hat aims to overcome these barriers by promoting open source AI models optimized for diverse deployment environments, from corporate data centers to edge computing.

Enhancing AI integration in hybrid cloud settings

With this acquisition, Red Hat seeks to redefine enterprise AI strategies by focusing on key innovations:

- Open source AI models: Scalable solutions ranging from 1 billion to hundreds of billions of parameters, deployable across the hybrid cloud.

- AI optimization: Enhanced performance engineering to improve operational efficiency and reduce infrastructure costs.

- Customization capabilities: Tools for securely fine-tuning AI models to address specific organizational needs.

- Collaborative ecosystems: Broader support for diverse AI tools, certified hardware, and chip architectures.

This approach mirrors Red Hat’s history of championing open source and cloud-native technologies, ensuring customers can leverage flexible solutions tailored to their unique use cases.

Expanding the Red Hat AI ecosystem

Neural Magic’s technologies will integrate into Red Hat AI, a comprehensive platform designed to advance ML and AI capabilities. Red Hat AI includes:

- Red Hat Enterprise Linux AI (RHEL AI): A foundation for deploying open source LLMs on Linux servers.

- Red Hat OpenShift AI: A platform for managing ML models across distributed hybrid cloud environments.

- InstructLab: A collaborative initiative fostering innovation in open source AI models.

The inclusion of Neural Magic’s tools, such as vLLM and pre-optimized models, reinforces Red Hat’s dedication to AI optimization and accessibility. The Red Hat acquisition of Neural Magic underscores the company’s commitment to advancing Generative AI and Machine Learning innovations, empowering organizations to unlock the full potential of open source AI in the hybrid cloud.

Advancing open and scalable AI with optimized solutions

Matt Hicks, President and CEO, Red Hat, said, “Efficiency, optimization and choice aren’t unique concepts when it comes to traditional enterprise IT, and we feel that gen AI should be no different. By adding Neural Magic’s expertise in gen AI performance engineering and optimization 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.”

“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,” said Brian Stevens, CEO, Neural Magic.

Dave McCarthy, research vice president, Cloud and Edge Services, Worldwide Infrastructure Research, IDC, said, “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 optimization 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 specialized hardware.”