Power BI developers optimize data models by implementing techniques like reducing table size, eliminating unnecessary columns, and using calculated measures instead of calculated columns. They establish proper relationships between tables using star schema designs, which minimize redundancy and improve query efficiency. By leveraging aggregations, they summarize large datasets to speed up reporting. Power BI developer also enable performance-boosting features such as DirectQuery for real-time data or Import mode for faster performance on historical data. Additionally, they use Power BI’s performance analyzer tool to identify bottlenecks and fine-tune measures written in DAX for optimized query execution.