The AC passes the air over a very cold radiator. That greatly reduces the temperature. At lower temperatures, air can’t hold as much water, so the water condenses on the outside of the radiator. The water drains down to a pipe that lets it drip outside. The very cold air is this mixed with the air in the room to cool the room.
The radiator is connected to a heat pump outside, which warms the outside to make the radiator inside the HVAC system cold.
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