and then valve is probably going to succeed, to Microsoft's detriment
Valve is using ARM to run Windows games on "ultra portable" devices, starting with the Steam Frame. At least right now, there isn't a competitive x86 chip that fits this use case. It also feels like more of an experiment, as Valve themselves are setting the expectation that this is a "streaming first" headset for running games on your desktop, and they've even said not to expect a great experience playing Half-Life: Alyx locally (a nearly 7 year old title).
It will be interesting to see if Intel/AMD catch up to ARM on efficiency in time to keep handhelds like the Steam Deck and ROG Ally from jumping ship. Right now it seems Valve is hedging their bets.