This would presumably let x86 windows games run on ARM hardware.
This is almost certainly meant for the next Valve VR headset, but ARM has so much better power efficiency than x86 that a future ARM based Deck would be a huge improvement to battery life.
Intel claims to have caught up with the upcoming Lunar Lake series but still to be seen.
That may be too late for whatever new device Valve is working on as given the lead time for such devices they may already have committed to an architecture for devices next year.
Also running X86 games on Arm devices is not likely to be efficient. I doubt the energy efficiency of Arm chips would outweigh the overhead of X86 to Arm translation?
But it's all speculation - even without hardware, getting Proton to work with Arm is good for steam regardless of any specific devices. For example it would allow steam to push the compatability tools onto Mac devices and even potentially mobile devices. Makes sense for Valve to do this without it meaning anything more that it being a god idea in itself.
It depends for the translation speed, if they only make a single device, they can likely do what apple does and improve their translation layer (FEX) to use specific instructions of the CPU they are using. Apples Rosetta is very efficient at what it does
Even Rosetta still gives up 10%+ efficiency compared to a native compilation of the same program. I'm not saying it's not viable, but in a resource constrained (especially battery-constrained) device 10% is a lot.
Part of how they're identifying that proton arm and steam Waydroid exists is that the tools are being used to test VR games uploaded to steam, or were uploaded in a batch of other VR assets.
I fully hope to see this apply to Steam Deck/Chromebooks/Android/etc, but right now any hints of these have been VR specific. We haven't seen the Proton ARM before, but previous leaks about Waydroid have also all been VR related.
About Intel catching up I might add that even if it proves to be true, this was not something that seemed to be expected. Valve might have been working on IR for a few years now?