Red Hat is buying Neural Magic, an artificial intelligence firm based in the Boston area.
Executives at the IBM (NYSE: IBM) subsidiary headquartered in North Carolina describe it as a play to level up in AI.
“Red Hat has a long history of being open-sourced focused,” said Chris Wright, CTO of Red Hat, during a press conference Tuesday. “We see the future of AI being accelerated through open, and our goal is to build this scaleable, trainable AI.”
Neural Magic has 45 employees and, while the companies are in the process of extending official offers, Red Hat expects the entire team to transition to the combined company.
Neural Magic’s software aims to accelerate generative AI. The company adds expertise in what’s called inference performance engineering — how AI models think based on their training. The company is also a leader in what’s called the vLLM project originally developed by UC Berkley. The project provides the open-source standard for open model serving.
Mike Ferris, Red Hat chief strategy officer, said the focus is “building the future of AI with open source.”
“We’re invested in that, it’s in our DNA, we’re going to continue that path,” he said, adding that the deal “extends our focus.”
For Neural Magic CEO Brian Stevens, it’s coming home in a very real way. He left Red Hat a decade ago to lead Google‘s cloud business. Working with Red Hat on AI “makes perfect sense,” he said.
“When I left Red Hat, it was a pretty tearful moment for me,” he said, adding that he’s stayed “Red Hat’s biggest fan” over the past decade.
Red Hat CEO Matt Hicks said in a blog post Tuesday that “the future of AI is open source.”
“I believe this significant milestone will enable us to accelerate our progress and deliver on our vision for the future of AI,” he wrote.
Neural Magic, which spun out of the Massachusetts Institute of Technology in 2018, has raised more than $50 million from investors such as Comcast Ventures, Pillar VC and Adreessen Horowitz. That includes a $30 million round that closed in 2021.
“Others are building hardware to make AI run really fast. We figured out how to do that in a software environment,” Stevens told Boston Business Journal at the time of the raise. “It’s really liberating and frictionless for developers and IT organizations.”
Neural Magic was cofounded by MIT professor Nir Shavit and MIT research scientist Alex Matveev. Stevens, a former chief technology officer at Google Cloud (Nasdaq: GOOG), took over the chief executive role from Shavit in 2021. Stevens is familiar with Red Hat, having served as its EVP & CTO of Worldwide Engineering a decade ago.
Neural Magic is yet another tie to Massachusetts for Red Hat — Hicks is based in Boston, as is much of the software company’s engineering team. Red Hat has not had a local CEO since Jim Whitehurst, who led it through its buyout by IBM before leaving in 2020.