Aggregate-Only Observability for Privacy–Utility Tradeoffs in Federated Learning
Federated Learning (FL) avoids centralizing raw data, but server-side access to per-client updates still creates a significant privacy risk because gradients can leak sensitive information through inversion and related attacks. A common defense is client-level Differential Privacy (DP), which reduces attack fidelity by perturbing individual updates, but often at the cost of degraded predictive utility, especially in heterogeneous settings. In this paper, we study a different design choice: aggregate-only observability, where the server learns only an aggregate update rather than the individual client contributions that compose it. We develop a unified evaluation framework comparing baseline FL, client-level DP-FL, an idealized sum-only aggregation mechanism (hide_sum), and a quantum-inspired aggregate-observation primitive (qsum) based on finite-shot GHZ-style phase estimation. Experiments on Texas PUDF and MIMIC-IV show that the aggregate-only regimes preserve competitive predictive utility relative to baseline FL while removing the direct per-client observation channel used by standard server-side inversion attacks. We also analyze utility sensitivity to shot budgets and the resource scaling of the quantum-inspired primitive. The results suggest that privacy–utility tradeoffs in FL depend not only on how updates are perturbed, but also on what the server is allowed to observe. Aggregate-only observability therefore provides a useful mechanism-level complement to noise-based privacy defenses, while also motivating hybrid designs to address residual leakage from aggregate updates.