What compression does Steam use for games?
To save bandwidth when downloading Steam games the files are sent compressed then uncompressed on the end user's PC. What compression algorithm is Steam using to do this?
SteamDB (which is not affiliated with Steam itself) https://steamdb.info/blog/steam-download-system/#:%7E:text=Each%20file%20is%20split%20into,same%20for%20all%20Steam%20users. that says they (Steam) use https://en.wikipedia.org/wiki/Lempel%E2%80%93Ziv%E2%80%93Markov_chain_algorithm :
Each file is split into roughly one megabyte chunks, and each chunk is compressed with LZMA and encrypted with an AES 256-bit key.
I was unable to find any official documentation. It's probably not publicly available. As mentioned previously, during installation of Steam, it probably will install or at least come bundled with the necessary files/libraries needed to decompress the files on the end users device.