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I wouldn't be surprised if they encrypt them at rest, but at some point the weights have to be loaded into vram.
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Newer NVidia cards (H100 and up) support both in-memory model encryption and ‘trusted’ execution environment/remote attestation, not sure how widely used in frontier model deployments, but at least vendor claimed perf overhead is ‘3%’ [0]

[0] https://www.spheron.network/blog/confidential-gpu-computing-...




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