Well it's definitely at least base reality for us.

And yeah, we just disagree there. I only think this hypothetical AI is denied any meaningful aspect of existence if there are fundamentally different sets of rules for the AI's universe compared to ours. As long as the rules are the same, I fail to see a compelling argument as to what exactly would be lacking from the AI's experience.

Edit: also, if this isn't "true base reality", since we're going there, it's interesting to think of the ethics of our simulators. I know I'm at least conscious, so if this isn't truly base reality, they seem to be okay putting conscious entities in simulations for at least certain situations.