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To fulfill negative entropy, yes it needs physical presence. Binary states changing back and forth inside a computer don't relate to entropy and are thus irrelevant to this definition.

Consciousness on the other side is another independent concept. Skynet is a character which existed inside a computer as an AI and was sentient. Why was it sentient? Because the movie tells it was.

Virtual robots in Robocode exhibit intelligence which is a 3rd concept. But intelligence as a combination of perception and decision making. Intelligence can help a system achieve negative entropy. Although most Robocode AIs are designed to maximize destruction. If they were ported to a physical robot, they would be maximizing positive entropy.