...if it succeeded it'd split up PC between Nvidia and AMD since in that case Nvidia and Intel might make their own Mantle-like API.
This is an excellent point, and I really wish that's what would happen, but here are the best possibilities I see:
01) The only titles that take advantage of this technology will be console-centric games where the publisher has decided that it wants to have the option to release quick and "less dirty" ports to the PC. This publisher will have decided that it wants to be the first to make its games inaccessible to much more than half of the primary PC gaming market--or roughly half, depending on how significant Intel is in your considerations (but growing day by day). In order for the publisher to be motivated enough to do this, AMD would need to somehow incentivize the publisher's adoption of this business strategy. The PC is not a closed platform like a console, however, so fewer options are available. AMD would basically need to pay directly out of pocket for a blockbuster game--something it will not do because gaming does not make up enough of its bottom line.
02) A title using this API will be in need of the performance enhancements it offers... because the current generation consoles have hit their limits already..? The only case in which this would be relevant would be when a publisher was releasing a title to all four platforms (Xbox, PS, Wii, restricted PC), wanted its game to look as cutting edge as possible, and needed the Wii U version to be visually consistent
with the others... without sacrificing all of the advantages of running on current gen hardware in the process.
03) I forgot what three was, but you can be sure that it was as important (and unlikely) as my previous two points.
I am a big AMD supporter, but Intel and NVidia--really just Intel--don't have to do anything at all, and they know it. How does all of this affect Java games development? The only way this could possibly affect it is if Java code ran on any of the games consoles, which it doesn't the last time I checked.