Sorry to hear about this trouble. Illustrator 25.3 works natively on M1 chipset, however, Autocad files are still not supported natively on M1 machines. Our team is working with Autocad to get this fixed.
Till the time it is fixed, please install older version of Illustrator (25.2.3) and stay tuned for updates.
I would also suggest posting this on our UserVoice page ( https://illustrator.uservoice.com/ ). This way, you will keep getting all the updates related to this feature and other users can also upvote, which would help us prioritize.