Rust and Python aren't playing in the same space, at all. One is a low-level systems programming language and the other is a high-level interpreted one. PyPy's core technology is potentially also useful for powering JIT interpreters for other interpreted languages, but again: doesn't compete with Rust. If anything, they're complementary, as Rust can serve as an alternative to C for writing performance-sensitive Python modules.
Anyhow, as they say in the release, the track through which PyPy was funded is for technologies Mozilla already uses. They're big Python users on the web services side (e.g., the Mozilla add-ons site is a Django app if I recall correctly), so this is an investment in improving the performance of their existing apps.
Even if Python is higher level language, most of python uses today could be replaced with Rust. There are very few scenarios in which a higher level language is needed (and in those scenarios, you don't need the speed and improvements of PyPy, with normal slow Python it's enough).
Anyhow, as they say in the release, the track through which PyPy was funded is for technologies Mozilla already uses. They're big Python users on the web services side (e.g., the Mozilla add-ons site is a Django app if I recall correctly), so this is an investment in improving the performance of their existing apps.