Nvidia provides dedicated hardware for DLSS. Will the next series of AMD GPU's? Or this is just more driver software manipulation? Not to mention DLAA in gaming is very nice too.
Not exactly - Nvidia's "dedicated hardware" are nothing more (and nothing less) than 16-bit floating point (FP) units. These are really useful for IA operations the like of DLSS. FSR 2.x use "regular" 64-bit units to perform similar operations, but all this extra precision is pretty much wasted. It's really possible that FSR's algorithm could be made to use existing 16-bit FP units and fallback to 64-bit when there is none...
Thus, FSR 2.x could run on any GPU, but would run faster on GPUs that can process 16-bit FP.