Microsoft has no choice.
Arm has been dominating the biggest growing market mobile (everything from phones to tablets and now). Intel is fighting a three front war now. While one battlefront is the mobile market where ARM essentially is the only choice, another battlefront is dominated by Nvidia with the processors for graphics and ML/AI. If that wasn't bad enough, AMD is attacking hard on Intel's home arena: PC CPUs.
When Apple dropped Intel for M1 they showed that Arm wasn't just some niche processor technology for less powerful devices, such as mobile devices.
So not only is AMD taking market shares in the PC market, ARM is on the rise and doesn't look very good for Intel right now.
Is Intel really capable of innovating their way out of their current path to extinction?