It seems the issue is not related to the architecture of the mac (M1 or Intel) or the Xcode version! Keep in mind, tools for the platforms you chose will be downloaded in the background, which might take a bit.

Close and re-open your Terminal and try your CLI tools again.

Choose as few as possible as these take hard disk space!

Select the platforms you may or may not develop with (depends if you are actually an iOS/macOS developer or if you just use the CLI tools such as myself).

Then you are told that you need to install additional tools, in my case clang.

Xcode-select: Failed to locate 'clang', requesting installation of command line developer tools. If you use command line tools like Homebrew, you might have received the following error (the part below is just an excerpt of it): clang: error: sh -c '/Applications/Xcode.app/Contents/Developer/usr/bin/xcodebuild -sdk /Applications/Xcode.app/Contents/Developer/Platforms/atform/Developer/SDKs/MacOSX.sdk -find clang 2> /dev/null' failed with exit code 34304: (null) (errno=Invalid argument) This issue happened on my MacBook Air M1 machine after update macOS Monterey 12.6 released recently and installing Xcode CLI tools version 14.0.

Installing xcode on mac