Ambient occlusion

Ambient occlusion measures how much of the hemisphere above each surface point is occluded by other objects in the scene. It is computed by tracing rays randomly distributed around the hemisphere above each shaded point. In the example pictures, the shader colors pixels white if they have a completely unoccluded view of the hemisphere, and black if the view of the hemisphere is completely occluded: the result looks a bit washed out similar to the way an object would appear on an overcast day.

Some fairly trivial examples

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Because samples are randomly distributed, the resulting images are noisy: you need to fire lots of ray per pixel to get a reasonably smooth result

Ambient occlusion computed with 32 samples
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Ambient occlusion computed with 128 samples
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More elaborated stuff

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Lighthouse
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scene courtesy of Syoyo Fujita