Startups and major labs are focusing on "world models," which simulate physical reality, cause, and effect. This is seen as the necessary step beyond text-based LLMs to create agents that can truly understand and interact with the physical world, a key step towards AGI.

Elon Musk's take on the simulation hypothesis includes a 'Darwinian' twist. Just as humans discard boring simulations, any creators of our reality would do the same. Therefore, the simulations most likely to continue are the most interesting ones, making 'interesting' outcomes the most probable.

Our current computation, based on Turing machines, is limited to "computable functions." However, mathematics shows this set is a smaller, countable infinity compared to the vast, larger infinity of non-computable functions. This implies our current simulations barely scratch the surface of what is mathematically possible.

The simulation of space-time and its physical laws are not arbitrary; they are essential constraints. These rules create the context required for consciousness to explore its possibilities and for subjective experiences (qualia) to become meaningful. Without limitations, there is no context for feeling.

The force of gravity is precisely tuned for life to exist. If it were slightly weaker, stars wouldn't ignite; slightly stronger, the universe would have collapsed. This 'Goldilocks' condition is so improbable that some scientists argue it suggests our universe is just one of many, most of which are sterile.

Instead of manually designing every detail, games like Minecraft use algorithms (procedural generation) to build vast worlds. This technique, similar to natural laws, allows for emergent complexity and unique landscapes that can surprise even the game's creators, fostering a sense of discovery.

Science's incredible breakthroughs have been about understanding the rules of our virtual reality (spacetime). Being a "wizard" at the Grand Theft Auto game (mastering physics) doesn't mean you understand the underlying circuits and software (objective reality). The next scientific frontier is to use these tools to venture outside the headset.

If any civilization can create a convincing simulation, and those simulations can create their own simulations, the number of simulated realities would vastly outnumber the single "base reality." This makes it statistically probable that we are living inside one of the countless nested simulations rather than the original one.

Cognitive scientist Donald Hoffman argues that spacetime and physical objects are a "headset" or VR game, like Grand Theft Auto. This interface evolved to help us survive by hiding overwhelming complexity, not to show us objective truth. Our scientific theories have only studied this interface, not reality itself.