Today we had a weird discussion over lunch: What exactly causes power consumption in a computer, particularly in the CPU?

Figures you usually see indicate that only a percentage (albeit a large one) of the power consumption ends up in heat. However, what exactly does happen with the rest? A CPU isn't (anymore) a device that mechanically moves parts, emits light or uses other ways of transforming energy. Conservation of energy dictates that all energy going in has to go out somewhere and for something like a CPU I seriously can't imagine that output being anything but heat.

Us being computer science instead of electrical engineering students certainly didn't help in accurately answering the question.