Problem Statement
What format does Next.js automatically convert images to for better performance?
Explanation
Next.js automatically converts images to modern formats like WebP and AVIF when the browser supports them, providing significantly smaller file sizes with equivalent or better quality compared to JPEG and PNG.
The Image component detects browser capabilities through the Accept header and serves the most efficient format supported, falling back to the original format for older browsers.
This automatic format conversion happens on-demand rather than at build time, optimizing images as they're requested and caching the results for subsequent requests.