Twitter revealed that it has acquired Magic Pony, which is not some sort of an enchanted steed but rather a company focused on machine learning and visual processing technology.

The purchase of Magic Pony, which is based in London, will expand the machine learning capabilities of the video technology of the social media platform while also adding significant talent to Twitter's Cortex team. This team is made up of researchers, data scientists and engineers who use machine learning to make improvements to Twitter's offerings.

In a statement, Twitter CEO Jack Dorsey said that the importance of machine learning in all of the things that Twitter does is increasing, and the acquisition of Magic Pony will allow the company to keep in step with the developments being made in deep learning research.

The terms of the acquisition were not officially disclosed. However, sources claim that the deal will see Twitter pay $150 million to acquire Magic Pony, an amount that includes retention bonuses for about 11 employees of the machine learning company.

The purchase will improve the videos on Twitter by utilizing Magic Pony's technology, which transforms videos that were taken by low-resolution cameras or recorded in low-light conditions into better quality ones through the recognition of textures and patterns.

Magic Pony has been creating and training neural networks to apply improvements to videos for just under two years. Twitter will tap the technology to provide a boost to its video content on the platform, especially streaming videos.

Live streaming videos has taken off recently, with rivals Facebook and Google offering similar services through Facebook Live and YouTube. One of the major challenges to use such a feature is that there are times when users experience bad mobile phone signals or weak Wi-Fi connections, which leads to unreliable and freezing live streams. In addition, some users may be using smartphones with low-quality cameras or would find themselves in less-than-ideal environments to capture great-looking videos.

With Magic Pony's technology, Twitter will be looking to solve these problems to gain an advantage over its rivals in the space.

Magic Pony is the third startup focused on machine learning that Twitter has acquired. The first purchase was in July 2014, when Twitter acquired Madbits, and the second was in June 2015, when the company purchased Whetlab. Madbits is a deep learning company that specializes in search technologies, while Whetlab has a system that will accelerate the internal machine learning efforts of Twitter.