With an AI-based upscaling algorithm, AMD now has a much better chance of delivering a competitive solution.
The biggest question we can’t yet answer is: How close does FSR 4 get to DLSS?
Are we looking at DLSS 2-level quality?

FSR 4 leverages FP8 processing, a new accelerated capability introduced in RDNA 4.
However, AMD has not confirmed whether this will happen.
FSR 4 will initially be integrated at the driver level.
On day one, all FSR 3.1-supported games will beupgraded to FSR 4via the driver.
Older FSR versions (FSR 3.0, FSR 2.2, etc.)
must be upgraded to FSR 3.1 within the game to access FSR 4.
However, FSR 4 does not improve frame generation quality over FSR 3.
AMD has provided performance data comparing FSR 4 upscaling and FSR 4 + Frame Generation.
For comparison:
These results are very promising.
However, closing the gap with DLSS 4 both in quality and adoption will take a long-term effort.
Hopefully, AMD is making major investments into upscaling and committing to sustained support in the coming years.