Recent advances in LLMs have reignited scientific debate over whether embodiment is necessary for intelligence. We present the argument that intelligence requires grounding, a phenomenon entailed by embodiment, but not embodiment itself. We define intelligence as the possession of four properties -- motivation, predictive ability, understanding of causality, and learning from experience -- and argue that each can be achieved by a non-embodied, grounded agent. We use this to conclude that grounding, not embodiment, is necessary for intelligence. We then present a thought experiment of an intelligent LLM agent in a digital environment and address potential counterarguments.