The video delves into the intricacies of path tracing, a rendering technique that enhances realism by simulating indirect light. Unlike traditional methods such as rasterization or basic ray tracing, which primarily handle direct light, path tracing accounts for light bouncing off surfaces, creating more realistic images. The speaker explains how path tracing works by shooting rays from a point and calculating the indirect light by sampling these rays. This method involves recursive ray tracing, where rays are shot out to simulate light coming from all directions, and the results are averaged to determine the indirect light at a point. The video uses examples like the Cornell box and a corridor scene to illustrate how path tracing achieves global illumination, making shadows and lighting more realistic. However, due to its computational intensity, path tracing is not typically used for real-time rendering in video games, though it produces superior visual results. The speaker also discusses the limitations of current technology in handling path tracing in real-time applications, suggesting that future advancements in GPU technology might make it more feasible.