Consciousness is the simulator.
Our experience IS simulated in a “matrix”, the matrix of our biotechnology system. Merely our virtual environment does everything it can to accurately “real time” sensor and actuator I/O with the environment. All of your senses and your internal sense of “now” may be overridden by other parts of your own mind (which people tripping find out, though also athletes and meditators achieve transmutations of consciousness.)
As far as “AGI”, you mean, “Authentic General Intelligence”, HA!
Our brains are machines our consciousness programs as sensors and actuators with lots of error correction (some natural, rest learned.) it’s a fractal-like feedback loop that evolves through refinement (or catastrophe.) That’s it! Our human wide variable intelligence is the supreme intelligence we seek, only within our single minds, not in an app, though orchestrating group intelligence is a fine art.
Myself, I do not think consciousness emerged from intelligence. Life emerged from consciousness (quantum domain is universal existential potential bound). Intelligence is merely a strategy for the continuity of identity (sustained existence.) life is an arms race for consciousness, and intelligence is a technology different lines invest in by context. Our lines chose generalization before specialization, winning out (whew). Semi-chaotically, our life is “intelligent design” (duh right?), we are arrogant of the minimal requirements for that. When we understand our own bodies intelligence we will be that much further out of our own stupefactions.