Managing large datasets in Power BI development services involves using efficient data modeling techniques, aggregation, and query optimization. Developers design data models that reduce redundancy and enhance query performance by implementing star schemas or snowflake schemas. They also use Power BI’s DirectQuery or Aggregation modes to handle real-time data without loading the entire dataset into memory. Additionally, data partitioning and incremental refresh strategies help in processing massive datasets efficiently. By implementing these techniques, Power BI development ensures that large datasets do not compromise performance or slow down report rendering.