Seems like a weird strategy to not compete out of fear of success.

Basically, consumer VRAM is dirt cheap, not too far from DDR5 in $/gigabyte. And high VRAM (especially 48GB+) cards are in high demand.

But Nvidia charges through the nose for the privilege of adding more VRAM to cards. See this, which is almost the same silicon as the 5090: https://www.amazon.com/Blackwell-Professional-Workstation-Simulation-Engineering/dp/B0F7Y644FQ

When the bill of materials is really only like $100-$200 more, at most. Nvidia can get away with this because everyone is clamoring for their top end cards

AMD, meanwhile, is kind of a laughing stock in the prosumer GPU space. No one's buying them for CAD. No one's buying them for compute, for sure... And yet they do the same thing as Nvidia: https://www.amazon.com/AMD-Professional-Workstation-Rendering-DisplaPortTM/dp/B0C5DK4R3G/

In other words, with a phone call to their OEMs like Asus and such, Lisa Su could lift the VRAM restrictions from their cards and say 'you're allowed to sell as much VRAM on a 7900 or 9000 series as you can make fit." They could pull the rug out from under Nvidia and charge a $100-$200 markup instead of a $3000-$7000 one.

...Yet they don't.

It makes no sense. They're maintaining an anticompetitive VRAM 'cartel' with Nvidia instead of trying to compete.

Intel has more of an excuse here, as they literally don't manufacture a GPU that can take more than 24GB VRAM, but AMD literally has none I can think of.