Red Hat, the global leader in open-source solutions, has announced a definitive agreement to acquire Neural Magic, a trailblazer in software and algorithms designed to accelerate generative AI (gen AI) inference workloads. This strategic move positions Red Hat to further expand its capabilities in optimizing AI performance, making it easier for organizations to run high-performing, AI-driven applications across any environment—from on-premises data centers to public clouds and edge infrastructures.

Why This Acquisition Matters for the Future of Gen AI

Red Hat’s acquisition of Neural Magic sets the stage for a more open, adaptable AI ecosystem—one where customers can seamlessly deploy gen AI models tailored to their unique workloads, without being constrained by the limitations of specific hardware or cloud environments. With the ability to run optimized AI inference on standard GPUs and CPUs, this acquisition ensures that organizations can scale their AI capabilities while maintaining control over their infrastructure and costs.

At the time of this announcement, Matt Hicks, President and CEO, Red Hat said, “AI workloads need to run wherever customer data lives across the hybrid cloud; this makes flexible, standardized and open platforms and tools a necessity, as they enable organizations to select the environments, resources and architectures that best align with their unique operational and data needs.”

With generative AI rapidly transforming industries by enabling the creation of new content, applications, and models, the need for high-performance AI workloads has never been more pressing. Neural Magic’s technology will allow organizations to run complex AI inference tasks with better efficiency, reducing reliance on expensive, proprietary hardware. This is particularly significant as the demand for large-scale AI models continues to grow, placing pressure on businesses to optimize their infrastructure for maximum performance.

The proposed acquisition highlights Red Hat’s ongoing commitment to empowering customers to run any application or workload—AI included—across the entire hybrid cloud landscape, from on-premises environments to public clouds and the edge.

Through this deal, Neural Magic will bring its deep expertise in generative AI performance engineering, along with cutting-edge model optimization algorithms and high-performance GPU and CPU inference serving. This will significantly enhance Red Hat’s capabilities in delivering optimized, scalable AI workloads across diverse cloud environments.

Neural Magic’s innovative expertise in AI inference performance engineering will play a key role in enhancing Red Hat’s ability to deliver scalable, cost-effective generative AI solutions that can be tailored to specific customer needs and data. Their advanced algorithms and open-source approach align perfectly with Red Hat’s vision of providing businesses with the tools they need to deploy AI workloads that perform at scale, with reduced latency and improved efficiency, across the entire hybrid cloud ecosystem.

As generative AI continues to reshape industries, Red Hat and Neural Magic are poised to lead the charge in building a more flexible, high-performance AI ecosystem that is accessible to developers and organizations alike—across the entire hybrid cloud. The future of AI-powered innovation is here, and it’s built on open-source, scalable solutions that deliver high performance at every level.

Red Hat and Neural Magic: Empowering the Future of Generative AI with Open Innovation

As generative AI continues to reshape the technology landscape, the increasing size and complexity of large language models (LLMs) have created significant challenges for organizations seeking to build cost-effective and scalable AI solutions. These models require immense computing power, energy resources, and specialized expertise—barriers that often make it difficult for most businesses to implement AI systems that are both customizable and secure.

Red Hat is addressing these challenges head-on, with the goal of making generative AI more accessible to a wider range of organizations. This includes leveraging open-source innovation through the development of vLLM, an open-source project designed to optimize and accelerate AI inference. Developed by UC Berkeley, vLLM supports key model families and accelerates inference performance across a variety of hardware backends, including AMD GPUs, AWS Neuron, Google TPUs, Intel Gaudi, NVIDIA GPUs, and x86 CPUs. With Neural Magic’s leadership in the vLLM project, combined with Red Hat’s robust hybrid cloud AI technologies, this acquisition sets the stage for organizations to implement AI strategies tailored to their unique needs, wherever their data resides.

Red Hat and Neural Magic: A Powerful Partnership to Drive Hybrid Cloud-Ready Gen AI

Neural Magic, spun out of MIT in 2018, has established itself as a leader in performance engineering for deep learning inference. With this acquisition, Red Hat aims to further its vision of transforming AI’s role in the enterprise, using its open-source portfolio to make AI more efficient, secure, and accessible across hybrid cloud environments.

By integrating Neural Magic’s technologies into Red Hat’s AI ecosystem, the company is enhancing its ability to offer customers a flexible, open pathway to implement generative AI models and strategies across diverse infrastructure environments. This collaboration will enable organizations to:

  • Run AI models at scale: With open-source-licensed LLMs, ranging from 1B to 405B parameters, that can be deployed anywhere—whether on-premises, across multiple clouds, or at the edge.
  • Customize AI models for private data: Using fine-tuning capabilities, businesses can tailor LLMs to their specific use cases, all while ensuring a stronger security footprint.
  • Optimize infrastructure performance: Through Neural Magic’s inference performance engineering, organizations can achieve operational efficiencies, lower costs, and improve model performance.
  • Access a broad ecosystem of AI tools: Red Hat will provide a partner-driven open-source ecosystem with access to certified hardware, chip architectures, and LLM tooling, offering customers greater flexibility and choice.

Red Hat AI and Neural Magic: Enhancing LLM Deployment Across Hybrid Cloud Environments

Neural Magic’s leadership in vLLM will significantly enhance Red Hat’s ability to support enterprise-grade AI deployments. With a highly optimized inference stack, Neural Magic’s technologies will allow customers to efficiently optimize, deploy, and scale LLM workloads across hybrid cloud environments, while maintaining full control over infrastructure choices, security policies, and model lifecycle management.

Brian Stevens, CEO of Neural Magic, shared his perspective on the company’s evolving role in the AI space, particularly concerning open-source innovation and its strategic move to join forces with Red Hat.

“Open source has repeatedly proven to be a catalyst for innovation, harnessing the collective power of community collaboration,” Stevens noted. He emphasized that Neural Magic has built a team of top-tier talent in AI performance engineering with a clear mission: to create ultra-efficient, cross-platform LLM serving capabilities that can meet the demands of modern generative AI applications.

Stevens also highlighted that the partnership with Red Hat isn’t just a strategic alignment of technologies but a cultural fit as well. Both companies share a deep commitment to open-source principles, and their combined efforts will provide organizations of all sizes with the tools needed to scale their AI transformations efficiently. This acquisition, according to Stevens, will enable businesses—from startups to large enterprises—to accelerate their AI initiatives, making it easier for them to deploy powerful generative AI models across any infrastructure.

As organizations increasingly look to leverage large language models (LLMs) for their AI-driven initiatives, the Neural Magic-Red Hat collaboration stands to play a pivotal role in enabling faster, more secure, and cost-effective deployments of AI models, with a focus on efficiency and performance across hybrid cloud environments.

This partnership underscores the growing importance of open-source innovation in democratizing access to advanced AI technologies, offering the industry a more flexible and scalable path toward AI adoption.

Neural Magic is also advancing the AI space with LLM Compressor, a unified library designed to optimize LLMs using state-of-the-art sparsity and quantization algorithms. This will help businesses deploy more efficient models and reduce the computational resources required for AI inference.

Red Hat’s AI Technologies: Lowering Costs and Skill Barriers

Red Hat’s AI portfolio is designed to simplify the deployment of generative AI models while lowering the cost and skill barriers for businesses. Key technologies include:

  • Red Hat Enterprise Linux AI (RHEL AI): A foundational platform for developing, testing, and running open-source LLMs like the IBM Granite family, optimized for enterprise applications running on Linux servers.
  • Red Hat OpenShift AI: A comprehensive platform that enables organizations to quickly develop, train, serve, and monitor machine learning models in Kubernetes environments across the hybrid cloud, on-premises, or at the edge.
  • InstructLab: An open-source AI project created by Red Hat and IBM, which allows the community to collaboratively improve open-source Granite LLMs using advanced fine-tuning technology.

Together, these innovations make it easier for organizations to adopt AI at scale, without the need for deep specialized expertise. By integrating Neural Magic’s vLLM technologies, Red Hat can offer a ready-made, optimized AI inference stack that is flexible, scalable, and open, providing businesses with the tools they need to harness the transformative power of generative AI.

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Looking Ahead

This acquisition is poised to drive the next phase of AI innovation, enabling Red Hat to deliver even more powerful, accessible, and cost-effective AI solutions. With Neural Magic’s expertise in performance engineering and Red Hat’s hybrid cloud platform, organizations will be empowered to deploy secure, high-performance generative AI models across diverse environments—accelerating their AI strategies and meeting the growing demand for AI-driven transformation.

The transaction is still subject to regulatory reviews and other customary closing conditions.

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