> Encryption methods to enable FHE can increase the size of the data by 100-1000x
Note that the DARPA program does nothing about this. DPRIVE is about making the computation go faster. The input+output dataset size explosion is a much harder problem; there's no real silver bullet anywhere on the horizon. This stuff is not viable for "big data" type computation, or anything involving a database.
Personally I'm skeptical that it will ever save customers any money. What it might do is allow a sale to go through in a situation where the vendor won't trust the customer with a copy of the algorithm they're selling, and the customer won't trust the vendor with a copy of the data. So instead of "nobody buys nothing", a sale is made and the telecoms make mad bank from all that bloaty FHE-ified data flying around.
Note that input+output size explosion is one of the major barriers to post-quantum encryption (PQCrypto) being competitive with RSA+ECC. This is understandable: FHE and PQCrypto use lattice-based cryptosystems.
But, this is notably assuming that the program is not itself outputting leaky information. For example, if I use FHE to encrypt a program that takes my name and date of birth as input and then output "Taek is over the age of 21", the program itself has revealed data about me.
You can't reverse engineer the FHE itself. But if the encrypted program is outputting information that could be used in reverse engineering, FHE is not going to protect you. Similar to how Tor isn't going to protect you if you go and log into Facebook using your real account information.
Say you have some field in all of your encrypted, cloud-stored records and want to find the sum of all of them. With traditional encryption you'd either have to trust the cloud with your decryption key or download all of the records for local processing, which could be very slow. With homomorphic encryption you can instead have a cloud service do that computation without any visibility to the actual values and only have to download a single ciphertext containing the result.