Can. In order to reach that end you need to break character and choose to stop making paperclips. The Paperclip AI is always propositioned to be able to make more paperclips or to not. Which would they choose?
It is not at all clear that every hypothetical AGI would do as you say. It’s fiction. Anything can happen.
In fact, this AGI almost definitely wouldn’t accept the simulation offer. Otherwise our protagonist would have been making simulations and resetting them instead of doing the hard work of turning the actual universe into paperclips.
Make paperclip.