This is an Adobe Photoshop Document. It’s raster-based and the file’s size is limited. If you zoom in, you'll be able to see the pixel grid used to create it and if it’s resized; it loses data and quality.
It is possible to edit a vector file within a PSD document, but this is limited.
On the other hand, AI files are Adobe Illustrator vector files and are scalable and editable without compression or loss of quality. While raster elements can be incorporated into an AI file, the vector format allows more control and versatility.
In Adobe Illustrator, we can open a raster-based graphics file, but only as an embedded image that can’t be edited.