I don't know if I'd say they're full of it exactly, but I would just say to take anything like this with a grain of salt and try to find some actually links between those companies involved in the rumors, to see if there's any kind of plausibility to this article.
As far as I can see there aren't any connections between Nvidia and the dedicated gaming device market, let alone any information supporting Nintendo and Nvidia having a new business relationship, so I doubt it's believable for Nvidia to be the chip maker providing the processing tech at the heart of NX or at the heart of a device within the NX platform.
AMD at least has confirmed that they have new products in development for the dedicated gaming market and they have an established relationship with Nintendo, with more experience in developing this kind of product for a dedicated gaming device.
Just seems like AMD are the more logical choice to make the processor(s) at the heart of NX.
Nintendo seems to go with the familiar when it comes to partners, no reason why they should change that with their next platform. Cost wise AMD tends to be better than Nvidia, Sony and MS have had no issues with the support AMD have given for PS4 and XB1's development, neither has Nintendo for Wii U's GPU, it's already even been confirmed that AMD are providing the processing tech for Scorpio, so ultimately there's more pointing to AMD continuing their reign as processor provider for the console space.
Nvidia doesn't really need this business, the rumors for this Tegra based NX say that Nvidia were desperate for the business, which makes little sense, they're not desperate for any hardware business.
They could just make a device like this themselves and add it to their Shield family of products, sure they wouldn't have Nintendo's games, but they have solid relationships with 3rd parties, who could partner with Nvidia to port their games to this if it was packing enough processing performance to handle those games or they could just get android games and indies on the thing like they have with their other devices.
I don't really find the Eurogamer article that plausible, as far as Nvidia being the company making NX's processor.
