I think if Elon Musk personally believes this, it could be possible indeed.
It sounds a lot like The Matrix, that's because it is. The 'simulation hypothesis', supported by Elon Musk,argues that what we experience as reality is actually a huge computer simulation created by a more erudite intelligence. This blows my mind and lets me feel even more smaller in proportion to the whole.
According to his theory, everything is software. Even the hardware that we can touch and feel is just 1s and 0s in a higher beings hard disk. I wonder what will happen the day this is proven. The world will either end or transcend.