The images of computer you have been allowed to see have been quite rudimentary. Why do quantum physicists tell us that something needs to be observed to be distinct, that otherwise it seems to smear itself out into a wave of possibilities ? Clearly the controlling AI doesn't have infinite resources to track every particle in the observable universe so just calculates for those being observed as necessary. ;-)
I think the main point here is that while not being able to tell illusion from reality seems awful, it ain't that much different to today. Our senses/brain creates our picture of what we think is out there from our sense data already. We find ways to decide what we believe and what we don't from an incomplete understanding already, and would likely also find ways to do so in the scenario you paint.
In any event AI is overhyped at present. It ain't that intelligent presently and some believe it never will be. It is a fast calculating, pattern spotting, data matching tool; and may well always be that way.