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The advancement of 5G and NextG networks through Open Radio Access Network (O-RAN) architecture marks a transformative shift towards more virtualized, modular, and disaggregated configurations. A critical component within this O-RAN architecture is the RAN Intelligent Controller (RIC), which facilitates the management and control of the RAN through sophisticated machine learning-driven software microservices known as xApps. These xApps rely on accessing a diverse range of sensitive data from RAN and User Equipment (UE), stored in the near Real-Time RIC (Near-RT RIC) database. The inherent nature of this shared, multi-vendor, and open environment significantly raises the risk of unauthorized sensitive RAN/UE data exposure. In response to these privacy concerns, this paper proposes a privacy-preserving zero-trust RIC (dubbed as, ZT-RIC) framework that preserves RAN/UE data privacy within the RIC platform (i.e., shared RIC database, xApp, and E2 interface). The underlying idea is to employ a computationally efficient cryptographic technique called Inner Product Functional Encryption (IPFE) to encrypt the RAN/UE data at the base station, thus, preventing data leaks over the E2 interface and shared RIC database. Furthermore, ZT-RIC customizes the xApp’s inference model by leveraging the inner product operations on encrypted data supported by IPFE to enable xApp to make accurate inferences without data exposure. For evaluation purposes, we leverage a state-of-the-art InterClass xApp, which utilizes RAN key performance metrics (KPMs) to identify jamming signals within the wireless network. Prototyping on an LTE/5G O-RAN testbed demonstrates that ZT-RIC not only ensures data privacy/confidentiality but also guarantees a desired model accuracy, evidenced by a 97.9% accuracy in detecting jamming signals as well as meeting stringent sub-second timing requirement with a round-trip time (RTT) of 0.527