Is this PSU failure?

A CX class powersupply is never meant for custom rigs with powerfull graphics cards,even corsair say itrs just for updating prebuilt media pc's, I would suiggest if you get a new PSU to upgrade to something more worthy of the task, I know its expensive, but a bad PSU can damage allot! :) I use a RM850

Nope.
Gtx 970 doesn't draw much power at all.
CX 750 more than capable to handle it.

Plus we're talking about a decent build and brand quality here, most new PSUs are much better and faultless than back when most power was on the 5v rail.

i know it is rated too, but that's irrelevant. Actually if you look at PSU comparison specialist they have pretty poor reviews and decently high failure rates, I had 3 inn the past that failed

Depends on your luck.
Everybody here would recommend WD hard disks over Seagate due to failure rates, but in my personal experience almost every WD drive out of many (7-8 I think) I had since a caviar WDC200 (20gb) failed me while Seagate didn't.
I also have a Corsair RM 650 going on 2 years which many reviews criticize for having bad caps and some even rant about fail rates. The most longevive PSU I had was a chinese firecracker no name that had a "supports Pentium4/AMD Athlon" logo on it. It's all buyers' luck and how you treat them in the end.

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The temp target for the 970 is 80c so it should be ok.

Sounds like it might be your hdd that is acting up.
Are you using a SSD? And what motherboard are you using?
Try changing the SATA cable as well.

Same stuff happened to me when the SSD didn't like the sata cable.

It was the PSU. Had a friend bring over his identical (sans newer) CX750M, plugged it in (using the same modular cables, obviously the mobo and CPU header were different) and it worked perfectly, absolutely no throttling issues. Pushed it for over two hours and we saw absolutely zero instances of the issue pictured, as opposed to it happening every 15 minutes or so.

I have ordered one of these. It will be here in two days. The moral of the story is that YES, power supplies can fail in such a way as to bottleneck the GPU and YES, it can be easily diagnosed by swapping power supplies.

I should have mentioned that was me manually ramping to get my temps away from the 76-78C range. I've never seen it get so hot before.