The problem is that they are slowly losing the mobile markets, while their usual markets are not growing as they used to. AMD is less vulnerable to the issues that arise from that because they are fabless, and they could pivot entirely to GPU or non-x86 markets if they really wanted to. But Intel has fabs (very expensive in terms of R&D and capex) dedicated to products for desktop and server markets that must continue to generate revenue.

The markets didn't really budge. Apple only grew 1% in the traditional PC market (desktop/notebook) over the last 5 years and that's despite a wave of new products. The snapdragons are below 1%...

And that's fine for them since they have also have their mobile platform, which is arguably more important at this point.

The question remains: Why would they spend billions only to "catch up"? That means, even after the investment is made and they have a product that is just as good, there is still no compelling technical reason for the customer to buy Intel/AMD over the other alternatives that are just as good, so their only possible avenue to attract customers is to drive the price into the ground which is a losing proposition.