That's how I see it playing out too, assuming Nvidia pull it off. By my reckoning, it roughly goes:
HPC -> Mainstream servers (and niches like ML) -> 'Professional workstations' -> Consumer desktops
Intel's response (at least in part) seems fairly sensible: throw money and developers at open-source and open-standardisation efforts to try and rally the rest of the market (e.g around stuff like OpenCL). Otherwise network effects from stuff like widespread CUDA usage will become too strong to overcome, at which point Nvidia will have a monopoly.
However, I think they're missing an opportunity when it comes to high-speed networking. Specifically, I think they should be looking to release cheap, simple and open-standards based networking gear without trying to cross-sell Xeons or whatever at the same time. I realise that this means cannibalising revenue from their CPU market, but at this point someone is going to do it so it may as well be them. Hell, they could probably even get away with tying the functionality in to some fairly widespread Intel CPU instruction set (say, from Ivybridge onward). However, anything past that and it's a non-starter for consumer segments (which, in my mind, is also the developer segment).
10gbit RDMA is actually sort of affordable nowadays (at least if you pick up gear from eBay). But it's currently a complicated mess of competing and incompatible standards. Some SFP+ modules are even vendor-locked; if they sense there's a different SFP+ branded module on the other end they stop functioning due to an 'unsupported configuration'. These kinds of things make it impossible for a decent sized consumer market to form. If Intel could just accept that the world is moving on with or without them and get a proper consumer market going, at the very least they'd keep the market open (and at the very best the might even tilt the odds in their favour).
AMD, on the other hand, I have no idea wtf they are doing (and neither do they, by the looks of it). It could just be my biases, but I really think the best strategy for them is to basically bet the house on open-source and really up their engagement with Linux core dev. While I get it's attractive to target the gaming market because it's profitable in the present, it probably means death in the future. Actually their interests are pretty aligned with Intel's, and they have highly complementary work forces. It sounds crazy, but I wouldn't be too surprised if Intel were to acquire AMD at some point, or at least buy out their GPU division...