It is a bad idea but not in the way you think. FHE hardware don't decrypt data on-chip. It's like using the Diffie-Hellman key exchange for general computation. The data and operations stay encrypted at any given moment while outside your client device.

The textbook example application of FHE is phone book search. The server "multiply" the whole phonebook database file with your encrypted query, and sends back the whole database file to you every time regardless of queries. When you decrypt the file with the key used to encrypt the query, the database is all corrupt and garbled except for the rows matching the query, thereby causing the search to have practically occurred. The only information that exists in the clear are query and the size of entire database.

Sounds fantastically energy-efficient, no? That's the problem with FHE, not risks of backdooring.

In FHE the hardware running it don't know the secrets. That's the point.

First you encrypt the data. Then you send it to hardware to compute, get result back and decrypt it.

>If you need to trust the encryption and trust the hardware itself, it may not be suitable for your environment/ threat model.

Are we reading the same article? It's talking about homorphic encryption, ie. doing mathematical operations on already encrypted data, without being aware of its cleartext contents. It's not related to SGX or other trusted computing technologies.

In theory you only need to trust the hardware to be correct, since it doesn't have the decryption key the worst it can do is give you a wrong answer. In theory.