Is our universe a fake?
Bostrum is not saying that humanity is living in such a simulation. Rather, his "Simulation Argument" seeks to show that one of three possible scenarios must be true (assuming there are other intelligent civilizations):
All civilizations become extinct before becoming technologically mature;
All technologically mature civilizations lose interest in creating simulations;
Humanity is literally living in a computer simulation.
His point is that all cosmic civilizations either disappear (e.g., destroy themselves) before becoming technologically capable, or all decide not to generate whole-world simulations (e.g., decide such creations are not ethical, or get bored with them). The operative word is "all" — because if even one civilization anywhere in the cosmos could generate such simulations, then simulated worlds would multiply rapidly and almost certainly humanity would be in one.
Kurzweil's worldview is based on the profound implications of what happens over time when computing power grows exponentially. To Kurzweil, a precise simulation is not meaningfully different from real reality. Corroborating the evidence that this universe runs on a computer, he says, is that "physical laws are sets of computational processes" and "information is constantly changing, being manipulated, running on some computational substrate." And that would mean, he concluded, "the universe is a computer." Kurzweil said he considers himself to be a "pattern of information."
Physicist Paul Davies has a different take. He uses simulation theory to tease out possible contradictions in the multiple universe (multiverse) theory, which is his countercultural challenge to today's mainstream cosmology.
"If you take seriously the theory of all possible universes, including all possible variations," Davies said, "at least some of them must have intelligent civilizations with enough computing power to simulate entire fake worlds. Simulated universes are much cheaper to make than the real thing, and so the number of fake universes would proliferate and vastly outnumber the real ones. And assuming we're just typical observers, then we're overwhelmingly likely to find ourselves in a fake universe, not a real one."