A lot of people are of the opinion they wanted to put the squeeze to everyone using ARM, but based on reading that doesn't really seem super feasible to me.

I think nvidia is worried about being shut out of the x86 space so there's nowhere to sell their products. So they had a long term play to guide ARM development as an alternative platform. I could see that platform being useful as a hedge, but also giving nvidia a better way of competing in consoles and if they were really successful maybe eventually turning Intel/AMDs x86 advantage into a weakness.

Back when Intel killed off all third party motherboard chipsets nvidia won a lawsuit against Intel where they forced Intel to ensure a pcie bus for GPUs on all their platforms. That provision expired a few years ago. If nvidia is smart (and I believe they are) they've never let go of that worry that APUs might shove them out of the market. Their best bet is to remain so much better than the competition they cannot be ignored, but it would be wise to have a backup plan.