Intel has been in this situation before and found their way out from it. They may pull another rabbit out of a hat like they did with the core architecture, or they could always just buy AMD.
Buying AMD will make regulatory offices fairly angry. The EU is just waiting for the chance to beat up Intel over their market dominance and anti-competitive shenanigans over the years.
They cannot buy AMD.
Given the financial positions involved they could easily afford to (market cap order of 30 vs 200 billion USD, Intel free cash flow per quarter of 5-15 billion). Regulatory authorities probably wouldn't let them, but that is another argument to make.
It would be monopoly.
It's the same argument - it's just not going to happen, regardless of monetary considerations.