Red Hat Acquires Neural Magic to Enhance Hybrid Cloud AI

Red Hat Acquires Neural Magic to Boost Generative AI Performance

Raleigh, North Carolina – January 13, 2025

Red Hat, Inc., a leader in providing open-source solutions globally, has announced the successful acquisition of Neural Magic. Neural Magic is renowned for its development of software and algorithms designed to enhance the performance of generative AI inference workloads. With this acquisition, Red Hat aims to integrate Neural Magic’s expertise in AI performance engineering and model optimization into its operations. This move is a strategic effort to fulfill Red Hat’s vision of creating high-performing AI workloads that can be tailored to meet the specific requirements of customers across various hybrid cloud environments.

The Importance of Generative AI and Large Language Models

Generative AI, particularly large language models (LLMs), has revolutionized the way AI is applied in business and technology. These models are capable of processing vast amounts of data to generate human-like text, making them invaluable in numerous applications. However, their implementation is often costly and demands substantial computational resources, making them challenging for many organizations to use efficiently.

Red Hat has identified a solution to these challenges by focusing on developing smaller, more optimized, and open-source models. These models are designed to be flexible and adaptable, ensuring that they can be effectively deployed across various computing environments and architectures. By leveraging Neural Magic’s expertise, Red Hat is poised to make significant strides in this area.

Neural Magic’s Contribution to Red Hat’s AI Vision

Neural Magic has been pivotal in advancing the development of optimized and efficient AI models. Their contributions align with Red Hat’s strategy of promoting open-source innovation and making AI more accessible to a broader range of organizations. Moreover, Neural Magic is a major contributor to vLLM, an open-source project from UC Berkeley focused on open model serving, which enhances the options available to organizations in building and deploying AI workloads.

The Future of AI in Hybrid Cloud Environments

With the integration of Neural Magic’s technology, Red Hat is committed to overcoming the obstacles associated with large-scale enterprise AI deployment. Their approach focuses on democratizing access to AI’s transformative capabilities through several key initiatives:

• Developing open-source licensed models ranging from 1 billion to hundreds of billions of parameters that can be deployed anywhere, from corporate data centers to multiple cloud environments and edge computing locations.
• Enhancing fine-tuning capabilities that allow organizations to customize LLMs according to their specific data and use cases, ensuring better security and performance.
• Applying inference performance engineering to increase operational and infrastructure efficiency.
• Building a robust partner and open-source ecosystem that provides a wide range of choices for customers, from LLMs and tools to certified server hardware and underlying chip architectures.

  The concept of choice is essential for generative AI today, similar to the importance of cloud-native or containerized applications in previous years. Selecting the right environment, whether it be cloud, server, or edge, and optimizing compute and inference resources are vital for successful AI strategies. Red Hat is resolute in its promise to provide customer choice across hybrid cloud environments, with the acquisition of Neural Magic serving as a testament to this commitment.

  Red Hat AI: Building an Open-Source Foundation for AI

  Red Hat AI, an integral part of Red Hat’s AI offerings, will incorporate Neural Magic’s expertise and technologies. This portfolio is designed with hybrid cloud environments in mind and includes:

• Red Hat Enterprise Linux AI (RHEL AI): A foundational platform for developing, testing, and running the IBM Granite family of open-source licensed LLMs on Linux server deployments.
• Red Hat OpenShift AI: An AI platform offering tools for rapid development, training, serving, and monitoring of machine learning models across distributed Kubernetes environments, whether on-site, in the public cloud, or at the edge.
• InstructLab: A collaborative open-source AI community project by Red Hat and IBM that empowers users to shape the future of generative AI by improving open-source licensed Granite LLMs using InstructLab’s fine-tuning technology.

  Additionally, projects like vLLM and LLM Compressor, along with pre-optimized models, will be integrated into Red Hat AI, making Neural Magic a crucial component of Red Hat’s AI platform offerings.

  Industry Reactions and Insights

  Matt Hicks, president and CEO of Red Hat, emphasized the importance of efficiency, optimization, and choice in enterprise IT. By incorporating Neural Magic’s expertise in AI performance engineering and optimization, Red Hat is committed to developing generative AI solutions that meet the unique needs of its customers, regardless of where workloads are executed or how they are optimized and trained.

  Brian Stevens, CEO of Neural Magic, highlighted the company’s contributions to reducing the infrastructure needed for deploying state-of-the-art LLMs at scale. He expressed excitement about collaborating with Red Hat to enable enterprises to harness the value of generative AI while minimizing barriers.

  Dave McCarthy, research vice president of Cloud and Edge Services at IDC, described Red Hat’s acquisition of Neural Magic as a strategic enhancement of its AI capabilities. By leveraging Neural Magic’s expertise in model optimization and inference acceleration, Red Hat is well-positioned to deliver more cost-effective and scalable AI solutions that reduce reliance on specialized hardware. This move aligns with Red Hat’s commitment to open-source innovation and strengthens its ability to offer versatile AI solutions across hybrid cloud environments.

  In conclusion, Red Hat’s acquisition of Neural Magic is a significant step towards advancing AI technology, making it more efficient, accessible, and adaptable to the needs of diverse organizations. This strategic move not only reinforces Red Hat’s position as a leader in open-source solutions but also sets the stage for a future where AI is more integrated and impactful across various industries and applications.

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