^This guy probably put it the best.^
The issue was MS originally saying ZOMG TEH POWAR OF TEH CLOUD BETTAR GRAFIX BETTER AI
Realistically, there's very little a cloud service can do to augment a game beyond the stuff we already have this gen. The examples we've actually been given of Teh Powar Of Teh Cloud have proven that:
For Titanfall they have said that Teh Cloud allows them to have NPC AI characters actually calculated server-side and implemented in game seamlessly. Translation: Since the game is running on dedicated servers, congratulations, they've implemented a server running bots. We've had that since... what, QuakeBot?
For Forza 5 they have shown that the game uses Teh Cloud to remember exactly how you drive; how aggressively you pass, take corners, how you hit your apexes, etc. Then your friends can race against the cloud-based AI drivatar even when you're not online, and your drivatar can win races for you! Translation: Your locally created drivatar is uploaded to the server where your friends download and race it, with their console doing all the AI calculations based on the parameters of your drivatar. At least, we *hope* that's what it means, otherwise they will be (hilariously) streaming a multiplayer AI car with all the lag that entails, when it can easily be done client side.
This is not exactly the groundbreaking cloud nonsense the PR mouthpieces were talking about, because that stuff isn't really feasible.