Comment by crote
Why do you trust your physical servers? Do you believe it is impossible for a backdoor to exist in the CPU's Management Engine? Do you inspect the contents of every single network packet entering and exiting? Do you have a way of blocking or inspecting all electromagnetic radiation?
Confidential computing is trying to solve the very problem you are worried about. It is a way of providing compute as a service without the customer having to blindly trust the compute provider. It moves the line from "the host can do anything it wants" to "we're screwed if they are collaborating with Intel to bake a custom backdoor into their CPUs".
To me that sounds like a very reasonable goal. Go much beyond that, and the only plausible attacker is going to be the kind of people who'll simply drag you to a black site and apply the big wrench until you start divulging encryption keys.
A physical server can use all the same mechanisms a VM in a cloud can use (worst case put your stuff in a single "confidential" VM), but can also rely on physical control of the machine. But there is no longer a 3rd party cloud operator in a pre-privileged position to exploit VMM or CPU vulnerabilities.
It is essentially by definition more secure than a VM anywhere.
I wouldn't "fully" trust it without going on-prem though. But trust isn't binary either; container < VM < hosted machine < on-prem machine. That's all there is to this.