SVM is a supervised machine learning algorithm that outputs an optimal hyperplane to categorize data points. It finds the hyperplane that maximizes the margin between the different categories. The data points closest to the hyperplane are the support vectors. There are different types of kernels that can be used to transform nonlinear data into a higher dimension to allow for linear separation. Key parameters that affect the SVM model are the kernel type, regularization parameter C, gamma value, and margin.