AMD funded a drop-in CUDA implementation built on ROCm: It's now open-source

Why would this not be AMD’s top priority among priorities? Someone recently likened the situation to an Iron Age where NVIDIA owns all the iron. And this sounds like AMD knowing about a new source of ore and not even being willing to sink a single engineer’s salary into exploration.

My only guess is they have a parallel skunkworks working on the same thing, but in a way that they can keep it closed-source - that this was a hedge they think they no longer need, and they are missing the forest for the trees on the benefits of cross-pollination and open source ethos to their business.

The problem with effectively supporting CUDA is that encourages CUDA adoption all the more strongly. Meanwhile, AMD will always be playing catch-up, forever having to patch issues, work around Nvidia/AMD differences, and accept the performance penalty that comes from having code optimised for another vendor's hardware. AMD needs to encourage developers to use their own ecosystem or an open standard.

The latest version of CUDA is 12.3, and version 12.2 came out 6 months prior. How many people are running an older version of CUDA right now on NVIDIA hardware for whatever particular reason?

Even if AMD lagged support on CUDA versioning, I think it would be widely accepted if the performance per dollar at certain price points was better.

Taking the whole market from NVIDIA is not really an option, it's better to attack certain price points and niches and then expand from there. The CUDA ship sailed a long time ago in my view.