What Kite supposedly does is crowd-source code by uploading users' code to its server and then aggregating that data to train their ML algorithm. Then they can apply said algorithm on a specific client's code to recommend autocompletion suggestions as you type.

There are plenty of great use-cases for ML in building coding tools, but the shady manner in which Kite imposes itself on Atom users who have these plug-ins installed (which is a large portion of the user-base), leaves a seriously bad taste in your mouth.