I wouldnt say compete as the whole concept of frame generation is that it generates more frames when gpu resouces are idle/low due to another part of the chain is holding back the gpu from generating more frames. Its sorta like how I view hyperthreads on a cpu. They arent a full core, but its a thread that gets utilized when there are poonts in a cpu calculation that leaves a resouce unused (e.g if a core is using the AVX2 accerator to do some math, a hyperthread can for example, use the ALU that might not be in use to do something else because its free.)
It would only compete if the time it takes to generate one additional frame is longer than the time a gpu is free due to some bottleneck in the chain.