Interesting analysis on the current state of the art for FHE:
"Fully Homomorphic Encryption (FHE) has long been considered as the holy grail of cryptography. The concept was imagined in the late seventies, but the first realization only came three decades later. Today, both the public and private sectors are embracing this new security paradigm and are actively working at making FHE more practical and easier to use."
Hey there! Have a look at Zama's website: https://jobs.zama.ai
We are actively recruiting people to work on FHE-friendly models for machine learning, as well as cryptography researchers.
I'd say a long way off. The commercial guys doing augmented reality are focusing on snapchat and instagram filters, not on fully immersive VR experiences. (for example https://atomicdigital.design)
Not to say the Oasis-type design isn't possible, just that we're aren't there yet, but as @rir494 said, it's hard to predict until you know what kind of resources and growth are really possible.
Also, you don't have to care where the data is being stored, because if it's fully end-to-end encrypted, location is far less of an issue (to your GDPR point). Alleviates a lot of the talk around the security risks posed by the unrestricted sale and transfer of sensitive data to foreign adversaries (China, Russia) that dominates the political landscape in the U.S.
The state of the art has definitely improved. Zama are doing something called 'programmable bootstrapping' which can enable efficient (e.g., faster) Homomorphic Inference on deep neural networks -- https://whitepaper.zama.ai/whitepaper.pdf?_ga=2.218937936.87...
Good question about database indexes; that could be an interesting use case study.
"Fully Homomorphic Encryption (FHE) has long been considered as the holy grail of cryptography. The concept was imagined in the late seventies, but the first realization only came three decades later. Today, both the public and private sectors are embracing this new security paradigm and are actively working at making FHE more practical and easier to use."