Data could be encrypted (on the cloud, with backups and all) and the software could be given permission to just access the data it needs, do the computation and

Data could be encrypted (on the cloud, with backups and all) and the software could be given permission to just access the data it needs, do the computation and then discard the data. To clear, these are hard problems to solve, which could be solved if there is a market for them. But the big tech companies have made it prohibitively expensive to carve out any market for software that respects the user. You can't start a business saying "let us have a fair exchange of money for services provided". Some other surveillance company would undercut you by providing the same service for "free". Even if you did establish a viable payment based business (like whatsapp), some big tech company will buy you out and turn it into a surveillance product.