Xbox won’t drop hardware because it would be ceding the platform narrative to Playstation. Put it this way: if this happens then you would be developing your games using a Playstation architecture- so Sony would be calling the shots on how you develop your games. You will only be playing games using Playstation accessories.
Windows is still the platform that the vast majority of games is played on, so Microsoft already has an advantage. Xbox controllers are the preferred controller of use for most players. So for Playstation games to appear on PC’s they need to adopt the Windows gaming standards.
It’;s good that Microsft technicians are talking to Intel, AMD, Qualcom, etc., because they know what, where and when the advances in computing technology are going. It helps them develop the coming gaming technology, and the software that will go to controlling item.