Arc will be the brand name for the Intel GPU formerly known as "DG2."
Intel has been working for years to enter the high-end graphics card market to compete with Nvidia and AMD, and today those efforts get a name: Intel Arc (not to be confused with Intel Ark, the site you go to when you need help with Intel's indecipherable processor model numbers). The earliest Arc products will be released in "the first quarter of 2022" and will be based on a GPU codenamed "Alchemist," a new, more memorable codename for a GPU previously known as "DG2."
The first Arc cards will be a follow-up of sorts to DG1—a card released only to system builders—which performs a lot like the GDDR5 version of Nvidia's aging, low-end GeForce GTX 1030. We don't have spec sheets for any of the Alchemist-based Arc cards yet, but the trailer Intel showed confirmed support for modern GPU features like real-time ray tracing and "AI Accelerated Super Sampling" that will compete with Nvidia's DLSS and AMD's FidelityFX upscaling technologies. The trailer also showed Arc silicon running real (if somewhat older) games like Forza Horizon 4 and Metro Exodus.
To demonstrate its commitment to the discrete GPU market, Intel announced several more GPU codenames that will succeed Alchemist in the coming years, including "Battlemage," "Celestial," and "Druid" (note both the alphabetical order and the high-fantasy theme).
Arc will represent Intel's first serious run at the gaming GPU market, but the company isn't starting from zero. The company has decades of experience in writing and updating graphics drivers, and it is in the habit of releasing both "stable" driver packages and beta drivers with improvements for specific games, much like AMD and Nvidia already do. And while it doesn't blow the doors off of AMD's integrated GPUs in its Ryzen APUs, the Intel Iris Xe graphics in 11th-generation Core laptops can actually run many games at 1080p or 720p.