Red Hat Completes Acquisition of Neural Magic to Fuel Optimized Generative AI Innovation Across the Hybrid Cloud

Neural Magic’s generative AI performance engineering and model optimization algorithms will enhance Red Hat AI, helping make production AI more accessible and achievable

Red Hat, Inc., the world's leading provider of open source solutions, today announced that it has completed its acquisition of Neural Magic, a pioneer in software and algorithms that accelerate generative AI (gen AI) inference workloads. With Neural Magic, Red Hat adds expertise in inference performance engineering and model optimization, helping further the company’s vision of high-performing AI workloads that directly map to unique customer use cases, wherever needed across the hybrid cloud.

The large language models (LLMs) underpinning today’s gen AI use cases, while innovative, are often too expensive and resource-intensive for most organizations to use effectively. To address these challenges, Red Hat views smaller, optimized and open source-licensed models driven by open innovation across compute architectures and deployment environments as key to the future success of AI strategies.

Neural Magic’s commitment to making optimized and efficient AI models a reality furthers Red Hat’s ability to deliver on this vision for AI. Neural Magic is also a leading contributor to vLLM, an open source project developed by UC Berkeley for open model serving, which will help bring even greater choice and accessibility in how organizations build and deploy AI workloads.

The future of hybrid cloud-ready gen AI

With Neural Magic’s technology and performance engineering expertise, Red Hat aims to break through the challenges of wide-scale enterprise AI, using open source innovation to further democratize access to AI’s transformative power via:

• Open source-licensed models, from the 1B to 100’s of billions parameter scale, that can run anywhere and everywhere needed across the hybrid cloud - in corporate data centers, on multiple clouds and at the edge.
• Fine-tuning capabilities that enable organizations to more easily customize LLMs to their private data and uses cases with a stronger security footprint;
• Inference performance engineering expertise, resulting in greater operational and infrastructure efficiencies; and
• A partner and open source ecosystem and support structures that enable broader customer choice, from LLMs and tooling to certified server hardware and underlying chip architectures.

The concept of choice is as crucial for gen AI today as it was cloud-native or containerized applications several years ago: The right environment (cloud, server, edge, etc.), accelerated compute and inference server are all critical for successful gen AI strategies. Red Hat remains firm in its commitment to customer choice across the hybrid cloud, including AI, with the acquisition of Neural Magic furthering supporting this promise.

Red Hat AI: An open source backbone for AI

The expertise and capabilities of Neural Magic will be incorporated into Red Hat AI, Red Hat’s portfolio of gen AI platforms. Built with the hybrid cloud in mind, Red Hat AI encompasses:

• Red Hat Enterprise Linux AI (RHEL AI), a foundation model platform to more seamlessly develop, test and run the IBM Granite family of open source-licensed LLMs for enterprise applications on Linux server deployments;
• Red Hat OpenShift AI, an AI platform that provides tools to rapidly develop, train, serve and monitor machine learning models across distributed Kubernetes environments on-site, in the public cloud or at the edge; and
• InstructLab, an approachable open source AI community project created by Red Hat and IBM that enables anyone to shape the future of gen AI via the collaborative improvement of open source-licensed Granite LLMs using InstructLab's fine-tuning technology.

vLLM, LLM Compressor, pre-optimized models and more are all slated to be incorporated into Red Hat AI, making Neural Magic an integral piece of Red Hat’s AI platform offerings.

Supporting Quotes

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, Worldwide Infrastructure Research, 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.”

Additional Resources

• Learn more about Neural Magic
• Read more about Red Hat AI
• Find out more about Red Hat’s vision for AI’s open future

Connect with Red Hat

• Learn more about Red Hat
• Get more news in the Red Hat newsroom
• Read the Red Hat blog
• Follow Red Hat on X
• Follow Red Hat on Instagram
• Watch Red Hat videos on YouTube
• Follow Red Hat on LinkedIn

About Red Hat, Inc.

Red Hat is the world’s leading provider of enterprise open source software solutions, using a community-powered approach to deliver reliable and high-performing Linux, hybrid cloud, container, and Kubernetes technologies. Red Hat helps customers integrate new and existing IT applications, develop cloud-native applications, standardize on our industry-leading operating system, and automate, secure, and manage complex environments. Award-winning support, training, and consulting services make Red Hat a trusted adviser to the Fortune 500. As a strategic partner to cloud providers, system integrators, application vendors, customers, and open source communities, Red Hat can help organizations prepare for the digital future.

Forward-Looking Statements

Except for the historical information and discussions contained herein, statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Red Hat, Red Hat Enterprise Linux, the Red Hat logo and OpenShift are trademarks or registered trademarks of Red Hat, Inc. or its subsidiaries in the U.S. and other countries. Linux® is the registered trademark of Linus Torvalds in the U.S. and other countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250113192550/en/