Red Hat, Inc., the world’s leading provider of open-source software solutions, announced the successful completion of its acquisition of Neural Magic, an innovative leader in performance engineering and model optimization for generative AI (gen AI) inference workloads. This acquisition further strengthens Red Hat’s AI portfolio by adding Neural Magic’s expertise in AI model optimization and inference performance, enabling more efficient and accessible AI operations across hybrid cloud environments.
Neural Magic’s advanced software solutions and performance engineering technologies are designed to optimize AI models for real-world deployment, enhancing Red Hat’s ability to address enterprise AI challenges. As generative AI continues to grow in demand, the need for smaller, more efficient models that can be optimized for diverse hybrid cloud environments has never been more urgent.
“Generative AI, particularly large language models (LLMs), offers tremendous potential but can be prohibitively expensive and resource-hungry for many organizations,” said Matt Hicks, President and CEO of Red Hat. “By incorporating Neural Magic’s capabilities into Red Hat AI, we’re taking another step toward optimizing AI workloads to make them more accessible. We’re empowering customers to tailor AI performance to their specific needs, wherever those workloads need to run, from the data center to the edge.”
Accelerating AI Accessibility Through Optimization and Open Source Innovation
At the core of this acquisition is the commitment to reducing the resource intensity and high costs often associated with LLMs. Red Hat views the future of AI in a world where open-source, optimized models—capable of running efficiently across a range of architectures—are the key to unlocking broader AI adoption. Neural Magic’s advanced algorithms for model compression and inference performance will contribute significantly to this vision.
Neural Magic is also a major contributor to vLLM, an open-source project created by UC Berkeley, which aims to provide a scalable solution for model serving. This initiative will further expand the flexibility and accessibility of AI, giving organizations more choices in how they develop, deploy, and serve AI workloads.
A Future Built on Hybrid Cloud-Ready Generative AI
By integrating Neural Magic’s technologies, Red Hat is positioning itself to drive the next phase of generative AI within hybrid cloud environments. This includes:
- Open-Source-licensed AI Models: From models with billions of parameters to those that scale into the hundreds of billions, these AI models are designed to be flexible and can run seamlessly across hybrid cloud infrastructures, spanning on-premise data centers, multiple cloud platforms, and edge environments.
- Customizable LLMs: Fine-tuning capabilities will enable organizations to personalize LLMs for specific use cases, enhancing both performance and security by running models closer to private data.
- Inference Performance Engineering: This expertise will improve operational efficiencies, optimizing AI workloads for maximum infrastructure performance.
- Robust Ecosystem Support: Red Hat’s ecosystem, including a vast network of partners and open-source tools, offers enterprises a wide range of certified hardware, software, and chip architectures to choose from.
“Choice is essential for the success of generative AI,” added Hicks. “Just as cloud-native and containerized applications transformed enterprise IT a few years ago, the right infrastructure—whether on the cloud, at the edge, or in hybrid environments—is crucial to the success of generative AI strategies. Neural Magic’s technology allows us to further support our customers in their AI journeys, giving them the flexibility they need to succeed.”
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Red Hat AI: Empowering Enterprises Through Open Source Innovation
The acquisition of Neural Magic aligns perfectly with Red Hat’s broader vision for AI, which centers on providing open-source, scalable, and secure solutions. Neural Magic’s technologies will be integrated into Red Hat AI, Red Hat’s comprehensive suite of generative AI platforms designed for the hybrid cloud:
- Red Hat Enterprise Linux AI (RHEL AI): A foundational platform for developing, testing, and deploying open-source LLMs, specifically optimized for enterprise environments running Linux servers.
- Red Hat OpenShift AI: A robust AI platform that enables the rapid development, training, serving, and monitoring of machine learning models across distributed Kubernetes environments, whether on-premise, in the cloud, or at the edge.
- InstructLab: A community-driven open-source initiative that allows developers to collaboratively refine and optimize the Granite family of LLMs, further advancing the capabilities of generative AI.
In addition to the integration of vLLM, LLM Compressor, pre-optimized models, and other technologies, Neural Magic’s solutions will be integral to the continued expansion of Red Hat’s AI platform offerings.
Matt Hicks, President and CEO, Red Hat: “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.””
Brian Stevens, CEO, Neural Magic: “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.”
Dave McCarthy, Research Vice President, Cloud and Edge Services, IDC: “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.”
This strategic acquisition underscores Red Hat’s vision to democratize AI, making it more efficient, customizable, and accessible for enterprises of all sizes.