So why do you think AMD will massively undercut Intel on CPU prices, but not do the same for GPUs against nVidia?
Because Radeon VII is a PR stunt made possible through Nvidia's snafu with RTX, not an actual and proper gaming product.
Nvidia come in with the RTX 2080 which features underpowered technology utilised by very little software at the expense of boosting traditional raster performance, all for a price tag that takes the mickey. Vega 20 was never intended to be a gaming GPU, but through brute force it can match the RTX 2080 in raster performance, so there's suddenly the opportunity to repurpose failed MI50 packages as a gaming product and suddenly release something that is on par with a top-end Nvidia product that's only a few months old.
Now, you could argue that since those MI50 packages were going in the trash, AMD could easily have charged $500 for Radeon VII since they were going to lose money anyway. This is true, but doing so would risk skewing perceptions of Navi's pricing later on: if a gaming card with 16GB of expensive HBM2 memory can match the RTX 2080 at $500, why would a card that can only match the RTX 2070 with half the amount of cheap GDDR6 cost as much as $250-300? Navi is a gaming-first architecture designed to be 7nm from its inception. Small, lean, cheap and fast (ish), that is where the potential to undercut Nvidia comes from; keep the HBM2 monster at Nvidia prices, but then release the lean and focussed product at a sensible price.
I think 2019 is the year where AMD attempt to bring some kind of sanity to CPU and GPU prices, but Radeon VII is not the product to do that. Ryzen 3000 will shift perceptions of just how much grunt and cores you can get on the desktop for a sensible amount of money, EPYC will turn major heads in what servers and datacenters can be equipped with for sensible money, Navi will shift perceptions on how much 2 year old gaming performance should cost.
And I think the PR stunt that is Radeon VII will be replaced by a "Big" Navi in early 2020 - same performance but much less power and noise for about $450, although I'd be surprised to see 16GB of GDDR6 (Radeon VII has set that precedent now, unfortunately).