Auto Loader in Databricks utilizes Spark Structured Streaming for processing data incrementally. This allows Auto Loader to efficiently ingest streaming or batch data at scale and to recognize new data as it arrives in cloud storage. Spark Structured Streaming provides the underlying engine that supports various incremental data loading capabilities like schema inference and file notification mode, which are crucial for the dynamic nature of data lakes.
Reference:
Databricks documentation on Auto Loader: Auto Loader Overview

Auto Loader is a Structured Streaming source that incrementally and efficiently processes new data files as they arrive in cloud storage. It supports both Python and SQL in Delta Live Tables, which are ideal for building streaming data pipelines. Auto Loader can handle near real-time ingestion of millions of files per hour and provide exactly-once guarantees when writing data into Delta Lake. Auto Loader is not designed for dashboard, machine learning, serverless, or batch workloads, which have different requirements and characteristics. Reference: What is Auto Loader?, Delta Live Tables

A streaming live table or view processes data that has been added only since the last pipeline update.
Streaming tables and views are stateful; if the defining query changes, new data will be processed based on the new query and existing data is not recomputed. This is useful when data needs to be processed incrementally, such as when ingesting streaming data sources or performing incremental loads from batch data sources. A live table or view, on the other hand, may be entirely computed when possible to optimize computation resources and time. This is suitable when data needs to be processed in full, such as when performing complex transformations or aggregations that require scanning all the data. References: Difference between LIVE TABLE and STREAMING LIVE TABLE, CREATE STREAMING TABLE, Load data using streaming tables in Databricks SQL.

https://spark.apache.org/docs/latest/api/python/reference/pyspark.ss/api/pyspark.sql.streaming.DataStreamWriter.trigger.html