Down to a certain level, it's always going to be the case that you can use 4 cut down cores to outperform a same-size single core that's optimized for single thread throughput. As is reasonably well known in the business, each "last 5%" of performance costs an additional 50% of the total size of the processing core. There are two ways to fight back. You can join the club and use cut-down cores of your own, or, you can make your single thread throughput optimized cores wider and more intelligent and support more total throughput by enabling features like STM4 (I hope I don't bettlejuice this thread by mentioning it) and pay the price in security vulnerabilities and their mitigations in addition to failed speculative execution costs when you go really deep with out of order windows. There are always going to be cases where you can use hundreds of threads on a single server in the era of virtual machines and "cloud" app services. Having a ton of isolated hardware cores will always have it's advantages.
I'm not particularly worried about AMD in competing with this concept. They have the ability to pivot to it any time they want. I'm also not worried about the features as a service model for them either as they will likely have to move in that range with the integration of the Xylinx IP.
What a lot of people don't realize is that these dedicated functional units often include IP that the chip manufacturer doesn't fully own. To cover the licensing costs of that IP, they will either have to pay up front and roll that into the purchase price of the chip, or, they will pay as it is enabled and leave it dark on the chip when it isn't. It's much cheaper to develop a single mask and print a million chips with several percent of dark silicon that's only rarely enabled than it is to make half a dozen different masks to produce a variety of different chips. It's been going on in the industry for decades. We're only just now getting to the point where they can enable them dynamically in a way that they feel is secure and can't be easily hacked. Pluton and SGX don't just protect you from hackers, it protects these concepts from users trying to fully enable parts that they already have in their possession. And, with things like DMCA, it's illegal for you to try to circumvent that protection mechanism because it has other uses that that would infringe. AMD will be doing the same thing themselves. Why wouldn't they? Even industry wants this. It's much easier to pay for a software feature upgrade than to rip out hundreds and hundreds of servers to swap processors or completely replace at the cost of a fortune in labor and equipment, so it gives them a longer life cycle on their existing installed equipment (in the future when these technologies exist). It also allows them to pivot away from it when something better comes along or the business they are working in slows down and less is needed.