that's the thing. it's Artificial, there is no magic. As far as I know, nobody has created sentient software.

Everything is done by having algorithms decide between states. The inteligence of a system is based on the number of states it is capable of evaluating, eliminating dead ends, and the evaluation algorithm.

AI simply looks at the options and picks the one that seems best. I have written quite a few AI programs, from a simple connect 4 solver to genetic algorithms and evolutionary strategy.

so to put it bluntly, an AI will always "just seem smart" but given enough resources it will seem a hell of a-lot smarter than most people.