Right now Microsoft has not set a date for the exact timing of the upgrade. So for the time being the service will continue to use the hardware that it's currently running off of. In its current state xCloud is powered by Xbox One S hardware inside of server blades.
Which seems to be just enough for things while the service is still in a beta format. The company is planning to launch xCloud before the hardware upgrade though. So additional power is probably going to be needed to help with the influx of new users soon after things go live.
Microsoft will upgrade xCloud to Xbox One X hardware
Though xCloud uses Xbox One S technology inside of server blades right now, the Xbox One X will launch later this year.
After that point, Microsoft plans to give xCloud a big boost by using the hardware from the Xbox One X. Which will undoubtedly make the service that much more powerful.
This will be thanks in part to the upgraded CPU, which allows Microsoft to run multiple (four) Xbox One S sessions at a time on one unit. Because of this, Microsoft should be able to bring more users online as it could fit the sessions of a few people on one piece of hardware.
xCloud will launch later this year as part of Xbox Game Pass
xCloud is currently available if you're part of the beta. But it won't be in beta forever. Microsoft plans to launch xCloud later in 2020 and it will be part of Xbox Game Pass.
The company confirmed earlier this year that it would be bundling its cloud gaming service with Game Pass. Offering an increased value for existing Game Pass subscribers. Which is already a good deal if you play games on Xbox.
There's no mention of price yet, but that will surely come once the service is closer to a full launch. Microsoft may even offer multiple bundle options to fit customers who want different things.
When xCloud launches later this year it will initially be for Android phones only. Though, the company is internally testing the service for use on Windows 10 PCs. So at some point it may eventually launch the service for Windows. That being said, don't expect it to happen until after the hardware bump.