They do make GPUs! They've made some beefy iGPUs in the past, like Broadwell with eDRAM, and they make discrete consumer GPUs like the very reasonably priced 16GB Arc A770 now, and they make 128GB server GPUs!
They have some very large GPUs, like Falcon Shores and the Battlemage enthusiast die, on their roadmap.
Also, AI is not always as "core happy" as you would think. For instance, llama.cpp can essentially saturate a DDR5 RAM bus generating tokens on a relatively modest CPU, hence a huge IGP would bring limited benefits in that specific phase. Its also a relatively "serial" operation since the next tokens depend on the previous once, hence its hard to get good GPU utilization without serving multiple clients in parallel. And other "AI chip" designs have diverged from GPUs, like this one:
https://fuse.wikichip.org/news/3256/centaur-new-x86-server-p...
> The NCORE itself has a very interesting design. It’s a whopping 32,768-bits wide SIMD VLIW machine.
Its seemingly one giant core!