Pick a random paper using Google Search, for instance
Click on the Cited By link, and you will see:
a list of writings, ranging from thesis, conference paper, arXiv paper, etc. etc....
published on a wide range of platforms such as academia.edu, arXiv, semanticscholar.org, ieee, nowpublishers...
using a variety of citation styles
It seems to me that if this was an automated process, then Google would have to keep track of every single new paper which has been published, and find the list of citation section in each paper, find a particular paper which has been cited, update the citation page for that particular paper and repeat for all citations for that paper.
But then it would have to gain access to those papers in the first place and some of them have subscriptions such as IEEE ones. It would have to ignore citation styles but keep track of correct version of whichever paper it has been cited (preprint, etc.).
Is this really how Google keeps track of citations in the Cited By link? Can someone who has insider knowledge into publish enlighten me as to how Google Search seems to be able to know citations between papers?