Understand NSX-T to understand what's happening here.
For those who are not familiar with VMware NSX-T -- one of the things it provides is an overlay fabric that allows virtual networks to operate without using VLANs. Each hypervisor has a TEP (Tunnel EndPoint) which handles encapsulation/decapsulation of frames on the fabric. Each hypervisor also has a distributed firewall engine, which allows security and forwarding to occur directly between virtual machines, on the same host or on different hosts, without connecting through a central firewall. It does this *today*. But it does it in the kernel.
With a Smart NIC, these engines will move into the NIC, freeing up the host to use 100% of its CPU to do actual work. This is kind of a big deal.
By the way ... hyperscale cloud providers have been doing this for quite some time now. What VMware is doing here, brings it to everyone else.