Probably not so much as “better” as it would be “almost as good for cheaper”.

The bespoke AMD part is an exercise in cost management. iGPU is more affordable but usually pretty low end. The bespoke AMD solution is an iGPU bumped up to a nearly on par with a mid tier discrete GPU.

If released with same generation of tech, I would expect the steam machine to have higher performance but at a disproportional higher price.