How does Power BI perform data compression?

Power BI performs data compression primarily by leveraging various algorithms designed to optimize storage and minimize the size of datasets. This process enables efficient handling of large data volumes, allowing users to create interactive reports without requiring extensive storage resources.

The data compression techniques employed in Power BI include dictionary encoding, run-length encoding, and columnar storage formats. These methods efficiently reduce redundancy and store data in a way that enhances query performance and loading times. For example, instead of storing repeated values multiple times, Power BI can represent those values in a unique manner, significantly reducing the overall dataset size without losing essential information.

This optimization is crucial for maintaining high performance while dealing with large datasets, facilitating quick data retrieval and analysis within reports and dashboards. Thus, the correct answer focuses on the effectiveness of Power BI's algorithms in reducing dataset size while preserving the data's integrity, enabling more streamlined and efficient data analytics.