Red Hat bets big on AI with its Neural Magic acquisition [Video]

Red Hat, the IBM-owned open-source software giant, has completed its acquisition of Neural Magic, a pioneering artificial intelligence (AI) optimization startup. Initially announced in November 2024, the deal closed on January 13, 2025, marking a significant step in Red Hat’s strategy to enhance its AI capabilities across hybrid cloud environments.

While the price was not disclosed, Neural Magic had previously raised $50 million in venture capital funding from various investors, including Andreessen Horowitz, New Enterprise Associates, Amdocs, and Comcast Ventures. We can safely assume that the deal wasn’t made for peanuts. The cause probably wasn’t hurt, I’m sure, by the fact that Neural Magic’s CEO before the deal closed was Brian Stevens, Red Hat’s former CTO and executive VP. 

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When the merger was first announced, Stevens said: “At Neural Magic, our vision is that the future of AI is open, and we have …