To be clear, the GTX 970 does have 4GB of VRAM. There is some truth to that video though. They did screw with the last .5GB to make it slower to widen the gap between the 970 and the 980. They couldn't charge $200 more for the 980 if they didn't.
I admit that when I first read that news I completely wrote of the 970. It didn't make sense to buy one considering the Radeon 290 is $40 cheaper and comes with 4GB of VRAM that wasn't screwed with. Then there was also the Radeon 290x with 4GB of VRAM for the same price as the GTX 970. If you just look at numbers the Radeons have a full 4GB of fast VRAM and the 970 has 3.5GB of fast VRAM and .5GB of slower VRAM.
There are other numbers to look at though. That would be fps in games. The fact is that the 970 outperforms the 290 and 290x despite the gimped .5GB of VRAM. Check out this comparison on GPU Boss to see why. Game benchmarks tell the same story. The 970 puts out more fps than the 290x.
http://gpuboss.com/gpus/Radeon-R9-290X-vs-GeForce-GTX-970
The GTX 970 beats the 290x in literally every one of their benchmarks.
The 290x has more GFLOPS, shading units, texture mapping units, a wider memory bus, and more render output processors. I have almost no understanding of what any of that stuff means but those are the things in favor of the 290x.
Check out this part of the comparison though. The 970 numbers are on the left and the 290x numbers are on the right. Mine has an even wider gap than that because I bought one of the higher factory overclocked models on the market. In addition to all that the 970 requires half as much power and runs cooler.
Better passmark score 8,619 vs 6,877 More than 25% better passmark score
Significantly higher effective memory clock speed 7,012 MHz vs 5,000 MHz More than 40% higher effective memory clock speed
Higher clock speed 1,050 MHz vs 1,000 MHz 5% higher clock speed
Significantly higher turbo clock speed 1,178 MHz vs 1,000 MHz Around 20% higher turbo clock speed
Significantly higher memory clock speed 1,753 MHz vs 1,250 MHz More than 40% higher memory clock speed
Better passmark direct compute score 4,115 vs 3,101 Around 35% better passmark direct compute score
Significantly lower TDP 148W vs 300W 2x lower TDP
The bottom line is that the 970 is a better GPU than the 290x even with the gimped .5GB of VRAM. I would have loved to have a 980 with all the benefits of the 970 minus the gimped VRAM but I wasn't willing to spend $560 on a GPU. The Radeon 300 series that is supposed to be released in the next month or two will probably put AMD cards back on par with Nvidia if not a little ahead but they won't be sold at the deep discount the 290x is selling for right now either.
Edit: ignore the pricing on the top of that comparison. It says those are prices available on Amazon but neither card is listed as low as they say it is. In reality they are both around $340.