Contrary to popular belief, the Psycho Drive is not the main energy source of Bison. He uses it to channel and store negative energy. The energy can be used to charge his "Psycho Power", or as a weapon. However, the continued use of such amount of energy is the reason for the deterioration of the body of Bison, which is damaging his health quickly while using absurd amounts of energy.
Through the combined use of the Psycho Drive with the satellite Shadaloo has in Earth orbit, it is possible for Shadaloo to shoot beams of psychic energy anywhere in the world and to amplify it through a magnifying glass on the satellite giant. This beam of energy is directed from the Psycho Drive to the satellite by way of one of the statues in Sagat's stage, which is revealed to be mechanical in nature. The destructive power achieved by the reflection of a mental ray on a small town could destroy it altogether, and this is an asset that Bison is waiting for the right time to use.
The machine also grants Bison a sort of invincibility; whenever he is defeated, he retreats to the Psycho Drive to regenerate himself. In addition, it can be used for the purpose of brainwashing people.
Despite all of this, Ingrid states in her Street Fighter Alpha 3 storyline that the Psycho Power was actually her power to begin with, and that Bison has stolen a part of it with the Psycho Drive. However, this statement is never referenced again, and is generally not considered canon.
When Cammy gains self-awareness, she challenges Bison to battle and defeats him, then uses the Psycho Drive to remove the brainwashing from the other Dolls. During Chun-Li and Charlie's mission to destroy Shadaloo, they learn the Psycho Drive powers M. Bison. When Guile fights Bison, they go inside the base. While Guile and Charlie plant bombs around the Psycho Drive to destroy it, Bison encounters them and Charlie rigs the charges to explode, taking the Psycho Drive, himself, and Bison with him. Before the explosion and during Guile and Chun-Li's escape, Chun-Li encounters Cammy, rallying the Dolls to safety.