For each prediction you set up with Prediction Builder, it scans a subset of records within a given Standard or Custom Object that you define. For each of those records, it reads a set of values from specific fields you provide (predictors). It then observes any correlations with the value of another field, which is known as the prediction field, also of your choosing.
After it has scanned the records, and when future records are created, it reviews the predictor field values and, using AI algorithms, outputs a prediction into a prediction result field. You can then use the predicted result field with an existing platform UI or reporting tools to display the prediction to the user (Process Builder rules or Apex Triggers are not supported). There are many AI algorithms available to perform this task, such as Random Forest...