Strategy Founder Saylor's AI-Driven Financial Innovation Raises Questions

Michael Saylor's recent appearance on the Diary of a CEO podcast has sparked debate about the role of AI in financial innovation. The Strategy founder claimed that he used ChatGPT to design a variable-dividend preferred share backed by Bitcoin, which enabled his company to raise $150 billion in financing.

The instrument, known as STRK and its variant STRC, is a convertible preferred share with a monthly variable dividend designed to maintain a stable price near $100. Saylor said that he used ChatGPT to explore structures of preferred shares that no human advisor had proposed before.

The result was a novel financial product that combined Bitcoin backing, a variable dividend, and a preferred structure without violating any regulatory requirements. However, the performance of the underlying asset has been volatile, with Strategy reporting an unrealized loss of approximately $9.9 billion on its 840,447 BTC holdings.