Competitor playing dirty, how should we respond?

Hey everyone, I have been running SEO at a startup for about three years now and built a comfortable amount of organic traffic with some relevant keywords in a very niche market of IT software whose ICP are remote companies. We have basically been coasting by until this year with solid leads from our articles, but a competitor emerged and started copying our entire strategy. At first, it looked cute, but then they started investing heavily and overtook us in a few TOFU topics. They even started creating content such as "Tired of company name, here are 10 alternatives." We responded rapidly and invested in keyword research and upskilling in writing for our team while utilizing AI writing software to scale production. We got the bump in traffic we needed to demonstrate success to superiores and retook some of the ground they stole, but looking at a recent sitemap, it seems they have formed a team to start a programmatic approach and make sure that keywords relevant to our industry are combined with locations. So they are creating a directory for x service in New Zealand, x service in Germany. They are also doing it in actions such as how to do x in Germany to United States. How to do x in Mexico and France. A year ago, I would have written it off as a waste of time to copy, but now, with GPTs becoming the new vehicles for search, I wonder if we should fight fire with fire and also do the same thing, creating similar directories. We are about 100 pages behind on this endeavor but it shouldn't be that hard to scale up as well. Or should we think about it from another perspective and continue focusing on our position among the keywords we are already beating them in?