Could Earth be inside an alien simulation?

Yes—Earth could be inside an alien simulation in the sense that the idea is logically possible, but there is no definitive evidence that it is true.

This idea is usually called the Simulation Hypothesis. A well-known version was proposed by philosopher Nick Bostrom in 2003, who argued that at least one of three claims must be true: civilizations usually go extinct before becoming advanced enough to run such simulations; advanced civilizations choose not to run ancestor simulations; or we are likely living in a simulation.

A few things are sometimes cited in its favor, but they are not proof:

• rapid progress in computing and virtual worlds suggests simulated environments are conceivable;
• some features of physics, like the finite speed of light and other apparent limits in nature, are sometimes interpreted as suggestive, though they do not imply a simulation;
• quantum mechanics is sometimes compared to “rendering,” but that is only an analogy.

People have also proposed looking for possible anomalies in high-energy cosmic rays or other observations that might hint at a computational grid or coordinate system, but no such evidence has been confirmed.

Arguments against the idea include the enormous computational requirements, the fact that we do not know whether consciousness can be simulated, and the lack of any direct empirical evidence.

So the short answer is: it’s possible as a philosophical idea, but it remains speculative and unproven.