Yep, they have been converted into digital life forms. I want the AI to have a mixed up view on protecting humanity that it believes the only way to ensure our survival as as pieces is to remove the biological element.

Yep the vaporisation is converting, but they won’t (thus the audience won’t) know what has really happened to the plane until they enter the virtual environment. Plus I deliberately used the term “Many” of passengers as there will be those who are unwilling to accept their new way of life and he (The AI) plans to delete those people once he has access to the systems he needs.

In terms of how, I was thinking nanotechnology, something that could both attach itself to individual neurons and break down cells / convert atoms into resources it needs, which could be its end goal to grow its own system which it can’t do if it is competing with humanity for the planet’s resources.