The fact that you can't afford a Tesla? It doesn't really matter, because we're all probably living in a simulated reality.

That's according to Elon Musk, who answered a question about the possibility of living in a simulated reality at the Code conference in California on Wednesday.

The simulation hypothesis, first proposed in 2003 by philosopher Nick Bostrom, posits that if many sufficiently advanced civilizations exist, and if they're likely to create simulations of the universe (or a slice of it), then we are almost certainly living in a simulation.

If you trust Musk, the chances of us not being in a simulation are insignificantly small. "There's a one in billions chance that this is base reality," Musk said. He bases this argument on the fact that humanity has experienced amazing technological advancement in the last few decades.

"Forty years ago, you had Pong, like, two rectangles and a dot. That was what games were. Now, 40 years later, we have photorealistic, 3D simulations with millions of people playing simultaneously, and it's getting better every year (...) If you assume any rate of improvement at all, then the games will become indistinguishable from reality."

And he had thought this through.

"I've had so many simulation discussions it's crazy. In fact, it got to the point where basically every conversation was the AI/simulation conversation, and my brother and I finally agreed that we would ban such conversations if we were ever in a hot tub," he said.

If this sounds like a bleak proposal — that humanity is basically an advanced version of The Sims — do not despair. According to Musk, being in a simulation could be a good thing.

"If civilization stops advancing, then that may be due to some calamitous event that erased the civilization. So maybe we should be hopeful that this is a simulation."

This is just one of many crazy really advanced ideas Musk laid out Wednesday. He also said he plans to send humans to Mars by 2024, and you should hear about his Neural Lace theory.

UPDATE: This article was updated to clarify the source and the nature of the simulation argument.

BONUS: Why is Elon Musk afraid of A.I.?

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