Can machines think? Are humans and their minds essentially physical entities? Particular views about the nature of intelligence and the human mind, i.e. the computational theory of mind, often appear either as the basis of or having taken inspiration from the field of Artificial Intelligence. It aims to explain intelligence by only resorting to physical explanation. From the Islamic standpoint, this might induce philosophical issues since Islam acknowledges in man the existence of spiritual substance, i.e. nafs (soul), in addition to the existence of the body and affirms its role in explaining human intelligence. Therefore, this article discusses some issues stemming from the interface between the philosophical underpinnings of Artificial Intelligence and Islam. Three issues are discussed: visual perception and abstraction, language and understanding, and knowledge and inference. The Islamic conception of human soul is taken from the works of Syed Muhammad Naquib Al-Attas. It is shown that intelligence is an aspect of the soul and its nature is spiritual and non-physical. Furthermore, intelligible forms imprinted upon the soul are also non-physical. This can also explain why the current AI lacks understanding, as shown in the ‘adversarial examples’ in visual abstraction, syntax/semantics distinction, and abduction as a ‘leap’ in reasoning.