(Or maybe it isn't: Musk is kinda vague about the maybe-how: all he's doing, really, is upscaling current ideas / methods of digital representation - a bit of The Matrix, etc - and hoping that he looks smart in interviews)
Is this an update of Plato's Cave? I dunno.
"A holographic universe, an idea first suggested in the 1990s, is one where all the information that makes up our 3-D ‘reality’ (plus time) is contained in a 2-D surface on its boundaries.
"Professor Kostas Skenderis of Mathematical Sciences at the University of Southampton explains: “Imagine that everything you see, feel and hear in three dimensions (and your perception of time) in fact emanates from a flat two-dimensional field. The idea is similar to that of ordinary holograms where a three-dimensional image is encoded in a two-dimensional surface, such as in the hologram on a credit card. However, this time, the entire universe is encoded.”