They would as they're not currently capable of doing something like this alone. The only way Intel could pull this off is to buy out nVidia, then maybe 3 years later they'd have something. Neither Intel nor nVidia individually have the combined knowledge and experience of developing CPU's and GPU's. Together they could do it, however Intels yet to buy nVidia out.
AMD doing this is probably the smartest thing they could do. They're never going to be able to compete directly with Intel on their own terms, much smarter to actually change the rules and create their own market. Thats what they're attempting to do here.
They have the potential to create a monopoly in this market parley because no one else has a comparable product. I expect we'll see these used extensively in super computers and Apple will possibly pick it up as well if the performance benefit is great enough. The big benefit Apple have here is they create both their hardware and software. OSX would be re-written to make use of it within a year or two.
Hey, don't have a go at me there as I'm quite anti Apple, having said that, their market share is enough that if AMD were to win them as a client they'd do significantly better than now financially. Once they're earning money (for a change) they'd be able to continue development and remain competitive (Once more, for a change).
The real danger of AMD going down this path is that if they do succeed in creating their own market, nobody else is offering anything to compete. That will mean higher prices for consumers. It really should be AMD criticizing Intel and nVidia for not trying something different. This has the potential to offer enormous performance boosts in those area's where x86 architecture has traditionally been weak.
