Larry Niven tossed out the idea of "selected lucky" humans, because somewhen in the future you'd have to win a state lottery to reproduce (because of indefinite life extension and whatnot.)

Probably AI will simulate the mind of every possible living creature so that every possible form of life will exist simultaneously.

It will probably start simulating organisms that have the simplest DNA first (since there are fewer possible permutations to simulate) and it will work its way up to long and complex DNA strands (including all possible permutations of human DNA), then will will simulate DNA of more advanced creatures which we can't even imagine... That essentially sounds like evolution.

Maybe our universe is already a simulation (maybe which is itself inside another simulation)... Like in the movie "The Matrix" except with infinite recursion.

Try the film the 13th floor.

Or try World on a Wire (Welt am Draht) ;)