The Xbox One will rely on the cloud they call Azure, to handle processing and allow for more powerful actions from the hardware itself.
The team at Turn 10 will use Azure to handle the creation of Drivatars for Forza 5. Based on a player's behaviour in races, the artificial intelligence will learn how you and other players drive to provide more realistic competition. The artificial intelligence will evolve over time and ultimately change the way the computers race even a week after the launch of Forza 5.
The cloud also allows for dedicated servers in multiplayer games. Games with heavy host advantage from P2P servers or games with game breaking lag will no longer face those problems because of the dedicated servers of the Xbox One.
Titanfall will also take advantage of Azure and use the cloud for a lot of the game's processing. Since Microsoft invested heavily into data centers for this cloud functionality, you can expect the same standards for every game, not just games Microsoft publishes.
The Xbox One will launch for $499 this November.