Intel announced today it expects to lose between $1.1 to $1.2 billion on its investments, a huge increase from the previous estimate of a $50 million loss. Most of that loss comes from Intel’s investment in Clearwire, which created a joint venture with Sprint to build a national mobile network using Intel’s WiMax technology. Clearwire’s stock has dropped more than 70 percent since the deal was announced in May, resulting in a $950 million “impairment charge” for Intel.

That comes less than a month after Intel Capital’s Arvind Sodhani told us he was excited, rather than worried, to have sunk so much of Intel’s portfolio into Clearwire. Of course, it must have been obvious even then that the investment would end the year as a big loss. (Fellow Clearwire investor Time Warner faces a similar loss.) While the Clearwire effort, which Intel hopes will boost sales of its chips, is off to a bad start, it’s too early to give up on it. After all, the deal was only approved in November, and Clearwire just announced super-cheap mobile wireless plans in Portland.

There’s more bad news for Intel, which also released preliminary fourth quarter earnings. Revenue is projected to be $8.2 billion, down 23 percent from the same period last year. The chip maker blames weakening demand for PCs, so this probably isn’t a good sign for the rest of the PC market.

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