Smart Search, not to be confused with Smart Storage which helps you save space on your device by deleting media that has already been backed up to Google Photos, is meant for files in the Documents folder of the Files app. It will use machine learning to identify important documents based on a variety of factors, including their content, file type, and creation date. Once a document has been identified as important, it will be highlighted in the Files app so that users can easily find it.
Source – @AssembleDebug (X)
In addition to highlighting important documents, Smart Search will also be able to suggest related documents. For example, if a user opens a contract, Smart Search might suggest other contracts that the user has saved. This could help users to stay organized and find the documents they need more quickly.
Smart Search is still in development, but it is believed that it will be released in a future update to the Files app. It is a new and innovative feature that could make the Files app even more useful, especially in cases where an important detail contained within a document is needed right away.