The move should help Intel silence calls by activist investors to split the company. Profit margins on the outsourced Xe-HPG will look abysmal compared to the profit margins on the in-house Xe-HPC and Xe-HP.
That doesn't really make any sense: HPG is a byproduct of Intel's HPC ambitions, a way to seed the platform to developers out there and possibly turn a profit along the way. Without it, Intel would need to waste about just as much time and resources making a low-end dedicated HPC SKUs for training and software development purposes, increasing the barriers to entry for HPC that much further. Kind of the same way that Intel's consumer x86 CPUs are a software development vehicle to upsell Xeons when you need to scale beyond consumer stuff.
HPG as a stand-alone company that has to duplicate all of the HPC R&D along with everything needed to support a company without datacenter and HPC sales prospects, CPU sales, existing customer base, etc. would have a very hard time becoming viable on its own. With all rumors pointing toward next-gen's massive performance gains coming with similarly substantial MSRP increases, GPUs are about to become really profitable if you can make anything decent by contemporary standards. As long as Intel manages to get HPG up to speed, the margins should be similar to its mid-range (i3-i7) consumer CPUs.
Worst case, Intel is no stranger to spending billions trying to break into new markets and then having to eat the exit loss because it isn't happening.