It'll be very useful for even local setups when the data needs to be confidential. Look at the research related to medical training of llms (ignore their current lack of direct usefulness/trustworthiness, those are potentially solvable), with a homomorphically encrypted session, the large inference servers never see hipaa protected data in a way that exposes it if the server is compromised even if its an on premises setup in your doctors office processing the data, reducing risk of the data leaking anywhere.