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April 10, 2008 -  IBM has unveiled a new supercomputer that is cooled by water instead of air, cutting energy use by up to 40%.  The new Power 575 supercomputer - nicknamed the "Hydrocluster" - uses water-chilled copper plates located above each microprocessor to remove heat from the electronics.

The Power 575, equipped with the new water cooling system and highly efficient Power6 microprocessors, is five times more powerful and three times more energy efficient than its predecessor, according to IBM. 

IBM researchers estimate that water can be up to 4,000-times more effective than air in cooling computer systems. (The Power 575, for example, requires 80% fewer air conditioning units to stay cool.) The research team is currently working on a new kind of water-cooling system embedded on a chip, which can pipe heated water out of the computer and into a building's heating system for reuse.

More information on IBM's Power 575 is available here.