Type inference is a technique by which a compiler automatically deduces the type of a parameter passed or of return type of a method. Java 8 onwards, Lambda expression uses type inference prominently.

See the example below for clarification on type inference.

Example- Type Inference

public class FunctionTester {

   public static void main(String[] args) {
      Join<Integer,Integer,Integer> sum = (a,b) ->  a + b;
      System.out.println(sum.compute(10,20));

      Join<String, String, String> concat = (a,b) ->  a + b;
      System.out.println(concat.compute("Hello ","World!"));
   }

   interface Join<K,V,R>{
      R compute(K k ,V v);
   }
}

Output

30
Hello World!

A lambda expression treats each parameter and its return type as Object initially and then inferred the data type accordingly. In first case, the type inferred is Integer and in second case type inferred is String.