By starting from physical principles, the paper formulates the basis of the biological intelligence and coscience formation. The work shows that far from equilibrium, the principle of maximum energy dissipation, in a fluid phase, brings the molecules to organize themselves in living systems (ordered stationary states) that sustain energy-matter fluxes that determine the architecture of the dissipative system. The driver of the process is the energy; the matter is the substrate. On this base, and thanks to a “selection rule”, the living systems developed a bi-phasic structure consisting of a solid network permeated by a liquid where fluxes of ions and molecules can be maintained. In this way they realize a “wetware” where the energy and the organization/information are handled, and where a high specialization of functions can be obtained by using the spatial delocalization leading to the development of the complexity of the shape. The outputs of a living system can be divided in two categories: 1) macroscopic outputs: Movements, definition of an organized reaction or plan of action, and 2) microscopic ones: Plastic rearrangement of structures, migration of chemical species and electrochemical dynamics (transportation of matter, rearrangement, sensing, storage and information handling). The biological intelligence is a product of these basic processes where the wetware (matter substrate) is continuously modified by the energy-matter fluxes. On this base, the artificial intelligence of computers can be seen as a subclass of intelligent processes since it owns some limitations due to the invariance of the material substrate (that is not self-modified by the energy fluxes) and by the unique form of the flux of matter that is given by the electron current. Finally, the definition of a bio-inspired artificial intelligence is discussed.