this is not entirely true, I think. secure enclaves can provide guarantee such that even the host machine cannot inspect the contents within the VM. so even though the AI model itself needs to see plaintext, all is happening in the enclave which the provider cannot see.
the main difference is where the guarantee comes from. for FHE, it comes from math, which we trust. for secure enclave, the guarantee comes from Intel/AMD's promise that their hardware is bugless/backdoorless, and that your adversary cannot directly inspect bits in the hardware
- If an AI provider has control over the AI algorithm running in the secure enclave, they can easily have functions that provide them the plaintext through a separate channel. secure enclave does not prevent that
- The output can reveal information to the provider, which homomorphic encryption would have protected
- Inference is running on GPUs - so its moreso nvidia than amd/intel, but this is just a nit
So homomorphic encryption exists so the user doesn't need to do work to figure out if the provider could be adversarial.