Okay, but you’re not running the simulation time 1:1, are you? What would be the point?
So very rapidly your simulation develops people, who develop algorithms and computers for which there are no physically possible (in the real universe) optimizations, so you’re computing for them 1:1. And they develop simulations of their own. And then their simulations develop simulations. And you’ve got to pay the energy cost for all that because some things can’t be faked; or you kill the simulation when it learns to develop its own simulation. And then... what would be the point?
There are some problems with “Okay, but then you just make things simpler,” where this would allow simulations to determine they were simulations. I don’t recall the details off the top of my head. (Its late and I’m typing this right before bed.)
So maybe there is infinite energy in the real world. Then why wouldn’t our universe look the same?
There are certainly kinds of simulations that are possible, but the most commonly discussed one is the ancestor simulation. And it just doesn’t physically work while also sticking to the point of running an ancestor simulation.