NV Chat: We have our entire team working on this issue with a high priority. This will soon be fixed for sure.
[10:11:54 PM] Me: So, what is the issue?
[10:12:07 PM] Me: What needs to be fixed?
[10:12:46 PM] NV Chat: We are not sure on that. We are still yet to find the cause of this issue.
[10:12:50 PM] NV Chat: Our team is working on it.

Update:

NVIDIA now has responded to the findings:

The GeForce GTX 970 is equipped with 4GB of dedicated graphics memory. However the 970 has a different configuration of SMs than the 980, and fewer crossbar resources to the memory system. To optimally manage memory traffic in this configuration, we segment graphics memory into a 3.5GB section and a 0.5GB section. The GPU has higher priority access to the 3.5GB section. When a game needs less than 3.5GB of video memory per draw command then it will only access the first partition, and 3rdparty applications that measure memory usage will report 3.5GB of memory in use on GTX 970, but may report more for GTX 980 if there is more memory used by other commands. When a game requires more than 3.5GB of memory then we use both segments.

We understand there have been some questions about how the GTX 970 will perform when it accesses the 0.5GB memory segment. The best way to test that is to look at game performance. Compare a GTX 980 to a 970 on a game that uses less than 3.5GB. Then turn up the settings so the game needs more than 3.5GB and compare 980 and 970 performance again.

So removing SMMs to make the GTX 970 a lower spec product over the GTX 980 is the main issue here, 500MB is 1/8t of the 4GB total memory capacity yeah, two SMMs is 1/8th of the total SMM count. So the answer really is, the primary usable memory for the GTX 970 is a 3.5 GB partition. ]