Spectral clustering embeds data into the eigenspace of the graph Laplacian, then applies k-means in that space. Given similarity matrix Wij = exp(−‖xi−xj‖²/2σ²), the normalized Laplacian is Lsym = D−1/2(D−W)D−1/2. The k smallest eigenvectors form a low-dimensional embedding where clusters become linearly separable.
This solves the normalized cut problem (Shi-Malik 2000): partition the graph to minimize cut weight relative to cluster volume. The method handles non-convex clusters that k-means cannot find. Click "Run Spectral Clustering" to see the eigenvector embedding and cluster assignments.