Getting SteamOS to work on Intel cards has been anything but smooth since the operating system arrived, thanks to installation bugs and issues. However, SteamOS 3.9 beta now reportedly works on Arc cards without problems; YouTuber ETA Prime reported in a recent video that his Arc B580 worked "on the first boot up" and ran games on SteamOS almost flawlessly.
The YouTuber tested several games, confirming that the Arc B580 can play games at playable frame rates on SteamOS. Cyberpunk 2077 at 1440p high settings with FSR set to quality mode ran at roughly 80 FPS; Horizon Zero Dawn at 1440p high settings with XeSS in balanced mode ran at roughly 70 FPS. Fallout 4 at 1440p ultra settings ran at a flat 60FPS with a V-Sync 60Hz lock with no dips, and Elden Ring also ran at a locked 60 FPS with no dips at 1440p max settings. Finally, Forza Horizon 5 ran at roughly 80 FPS at 1440p high settings.
Less than a handful of issues were present when running the Arc B580 on SteamOS; the biggest issue was XeSS support, which could only run on the shader cores on SteamOS. The Linux drivers for the Arc B580 reportedly aren't configured to run XeSS on the XMX cores, forcing the GPU to run the upscaler on the shader cores instead. This issue also extends to XeSS frame generation, which was incompatible due to the tech being inaccessible to the XMX cores through the Linux driver.
Regardless, seeing SteamOS running on the Arc B580 without any installation workarounds is a huge improvement from where SteamOS support was with Intel Arc graphics cards previously. Support was technically baked in with SteamOS 3.8; however, support was geared primarily towards Arc iGPUs for handhelds that used Intel SoCs. If you wanted to run an Arc card on SteamOS, you had to use one of several workarounds to get SteamOS to install with the card. One of the more popular methods was to install a supported AMD graphics card for the initial installation, then swap to the Arc card after the OS install was complete.

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Does SteamOS 3.9 beta install and boot directly with an Intel Arc B580 without using previous installation workarounds?
What limitations of XeSS on the Arc B580 under SteamOS 3.9 beta were reported related to XMX cores and shader cores?
Does SteamOS 3.9 beta now include native support for both AMD and Intel discrete GPUs, leaving only NVIDIA unsupported?
Is XeSS frame generation currently compatible with the Arc B580 on SteamOS 3.9 beta according to the report?
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With SteamOS now compatible with AMD and Intel graphics cards, that leaves NVIDIA GPUs as the only mainstream GPU manufacturer Valve's operating system does not support. However, NVIDIA is working closely with Valve to develop full GeForce compatibility with SteamOS, so we will see full support for all three GPU manufacturers soon.






