16 bit textures

Hello. I have a question regarding using 16-bit luminance textures and OpenGL. When you use glTexImage2D(GL_TEXTURE_2D, GL_LUMINANCE16, width, height, 0, GL_LUMINANCE, GL_UNSIGNED_SHORT, pixel_data), do pixels on the graphics hardware stay as 16-bits? I would like to know if the 16 bits are converted to some RGBA values internally onboard or not. If they do stay as 16-bits, when do they scaled to 8888 (monitor color depth)? Thank you.