This is a major development.
I did not expect Nvidia to de facto give up on their Windows-on-Arm efforts. I guess they are smart enough to recognize that WoA is a joke (especially when WoA devices are priced higher than average) outside using WoA as a browser/office/media player device.
This honestly sounds like it was driven by pressure from the US administration.
That being said, we might see some interesting developments from this collaboration.