The thing is, for your 4070 this isn't really an either/or situation since DLSS 4 actually needs Ada or newer cards for frame generation to work - so you're getting upscaling from DLSS 4 but not the AI frame gen your buddy mentioned. FSR 3 frame generation works on your card though, which is where things get interesting.
In practice, DLSS upscaling quality is still generally sharper and cleaner than FSR 3 upscaling, especially at lower quality presets. But FSR 3's frame generation on your 4070 can genuinely boost performance in a way that matters, whereas you'd just be using DLSS 4 for the upscaler part. So if you're chasing higher framerates, FSR 3 with frame gen might actually give you more of a boost overall. The tradeoff is FSR 3 upscaling can look a bit softer, but a lot of people don't notice it when framerates go up by 30-40%.
I'd say test both in Cyberpunk and see what feels better to you - FSR 3 if you want those extra frames, DLSS 4 if image clarity matters more. Upscaling tech has gotten way less noticeable lately anyway, so honestly you probably won't regret either choice 🎮