Just like your mobile device is one end of the end-to-end encryption, the TEE is the other end. If properly implemented, the TEE would measure all software and ensure that there are no side channels that the sensitive data could be read from.
Similarly with AI. The AI is one of the ends of the conversation.
The difference here is that the web server receiving a request for Confer receives an encrypted blob that only gets decrypted when running in memory in the TEE where the data will be used, which IS an end in the system.