A power supply unit (PSU) in a computer functions by converting AC (alternating current) from an electrical outlet into the DC (direct current) required by computer components. The PSU distributes power to components like the CPU, GPU, and motherboard, ensuring they receive the necessary voltage and current. Additionally, it incorporates safety features to prevent overloads, short-circuits, and other potential failures. A reliable PSU is crucial for maintaining system stability, overall performance, and the longevity of computer hardware.