How it works
A classic game “paints” triangles and approximates light with tricks. Ray tracing sends rays from the camera into the scene and tracks what they hit, where light comes from and what reflects. It is physically more accurate, but very demanding.
Why AI
Even the strongest cards can handle only a limited number of rays. So the game renders at a lower resolution and a neural network (DLSS) upscales the image. Newer versions can even generate whole frames between real ones. See Deep learning and neural networks.
Path tracing
The top level is path tracing, where all lighting is computed with rays. Cyberpunk 2077's Overdrive mode from 2023 is a showcase.