The reality is more along the lines of traditional rendering with special ML models inferring and splicing in generated frames. Framegen is already in most modern games and Nvidia has made it a driver level option for many unsupported ones. In case you haven’t used it — it is black magic. Studios will have almost no motivation to optimize if framegen can be perfected, and it’s not far.
Hopefully Nvidia doesn't try to bundle a bunch of slop to completely change faces of characters with AI into future framegen updates (claiming that it's in control of the developers but then not even checking with the devs of the game they put into the trailer for it) like they did last time...
https://www.techradar.com/computing/gpu/nvidias-ceo-goes-ful...