Am no PC or Tech freak so i don't know much about game Hardwares.
From little i know:
NVIDIA GPU served the original XBOX well but it was not well utilized & was unsuccessfully compared to the PS2.
ATI GPU was introduced to the XBOX 360 because of the unsuccessful NVIDIA(not realy sure why).ATI has done a realy nice job for the XBOX 360 providing the console with the most unique GPU features out of all the current consoles. Since Microsoft didn't own full right to the NVIDIA gpu so a hardware EMULATOR for the original XBOX was not implemented on the XBOX 360 instead a software EMULATOR was implemented by the help of the ATI gpu.
ATI seems to have benefited the XBOX 360 very well but currently both
NVIDIA & ATI seems to released various powerful GPU series for the PC & there are still future GPUs series in development within the 2 companies.
So between NVIDIA & ATI which and why do you think microsoft will go for.
YOUR REASON.
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