Does this really matter if the OS AI tools are watching what's written to your display?

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Interesting point. If you're using iOS, in theory they're using similar encryption for anything they store of yours. I suppose you're having to trust them too (although them violating that trust would be a major hit to their brand, though certainly not impossible). I suppose the only solution here would be to use an audited open source OS?

That's the only one I can imagine. Otherwise this just seems like buzzword marketing. To each their own. Everyone has a different threat model.