Then a bunch of the graphics people (who did the GPU for the Nintendo 64) went to found ArtX [1], which got bought by ATI.
There was also the ill-fated Fahrenheit project.
[0] https://www.forbes.com/2002/05/06/0506sun.html#703713c16a5e [1] https://en.wikipedia.org/wiki/ArtX
And I'm not saying not reacting to Itanium means go all in on your existing ISA and your existing business model. That wasn't my argument.
My argument was don't go all out on everything that currently makes you money and your costumers expect for a totally unproven architecture that even if it works out means that you are just gone be a commodity provider with commodity software. Something totally outside of the whole history of Silicon graphics.
SGI also did have X86 workstations, first with a proprietary SGI chipset that required as special HAL for NT/2K, and then just a standard PC workstation.
Giving up instantly when Itanium was announced would have just made them a company that waste a lot of money a lot of money on porting things to Itanium (and Sun had quite a lot of software that's not exactly easy to port). Only to not have a 64-bit system to build servers from. Essentially at best offering good x86 32-bit servers for the next couple years.
To be sure x86 workstations and servers should have been a big part of their strategy already in the late 90s. But that's not the same as adopting Itanium.
SGI did exactly what you suggest, give up on their chips and OS. This was terrible choice. Because Itanium was very late they had to restart MIPS development and were not able catch back up. Their Itanium products all didn't sell well even when they finally arrived.