The simulated Borges refers to Martin Fierro, Karnak and Cambaluc.
I have quoted here how World War I came to be called "Terran Planetary War, Phase One" in an unfortunate later addition to Robert Heinlein's Future History. In Anderson's Harvest The Fire, it is called "...the first Global War." (p. 13) Future historians, particularly those for whom Earth is not the only occupied planet, are bound to view WWI and WWII differently. They might have had interplanetary conflicts, not "World Wars" but "Wars Between Worlds."
In the terminology of Anderson's last future history:
a "dreambox" generates a fully realistic virtual reality based on a standard program chosen from "'...many millions of different milieus and situations...'" (p. 13);
a "quivira" generates an equally realistic but entirely new virtual reality by working with the "cybercosm" (the conscious AI internet).
Dreamboxes contain simulations of many historical figures but not of Borges who is by now little known. Therefore, Nichol, using a quivira, pays extra for a sophotect (an AI) to:
scan world databases;
synthesize a personality and a setting.
Nichol meets Borges.