This may be the solution to Fermi's Paradox. There may be no galaxy spanning AIs because by the time civilizations can accomplish such things they realize that continuity of entity identity is an illusion and have grown beyond wanting to spend effort on illusions.

I don't quite get this part. How would this explain the Fermi Paradox? Why would all civilizations cease growth and expansion just because identity continuity is an illusion? Why would such an evolutionarily unstable pattern be replicated broadly amongst so many alien species?