U.S. President Donald Trump signed an executive order directing the government to develop a sovereign wealth fund on Monday. He suggested that this fund could potentially benefit from TikTok if his administration succeeds in securing an American buyer for the platform.
U.S. Wants a 50% Stake in TikTok
Previously, Trump had issued an order giving TikTok until early April to find an approved buyer or partner. Now, he has expressed his intention for the U.S. to acquire a 50% stake in the widely popular social media app, which is currently owned by the Chinese company ByteDance. Speaking from the Oval Office, Trump described TikTok as an example of an asset that could be placed in the new U.S. fund.
“We might put that in the sovereign wealth fund, whatever we make or we do a partnership with very wealthy people, a lot of options,” Trump said. “But we could put that as an example in the fund. We have a lot of other things that we could put in the fund.”
Sovereign Wealth Funds
Sovereign wealth funds invest in assets such as stocks, real estate, and bonds. Many countries fund these investments using budget surpluses. However, the U.S. currently lacks such reserves. Even so, Trump pointed out that several nations already operate these funds and predicted that, over time, the U.S. could surpass the size of Saudi Arabia’s sovereign wealth fund. “Eventually we’ll catch it,” he said.
U.S. and State-Level Investment Funds
Globally, there are over 90 sovereign wealth funds managing assets worth more than $8 trillion, as reported by the International Forum of Sovereign Wealth Funds. In the U.S., more than 20 state-level funds exist, including large ones in Alaska, Texas, and New Mexico. These are primarily funded by revenues from oil, gas, and mineral resources and support local programs like education. Although these funds are government-owned, they typically operate independently with their own staff and investment strategies.
Treasury and Commerce Officials to Oversee the Fund
To move the plan forward, Trump has assigned Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to lead the planning for the sovereign wealth fund. The executive order requires them to present a strategy, including investment recommendations and governance guidelines, within 90 days. However, establishing the fund will likely require congressional approval.
Biden Administration Previously Considered a Similar Fund
Before leaving office, former President Joe Biden’s administration had explored the idea of creating a sovereign wealth fund to support national security investments. Nevertheless, no concrete steps were taken.
Government May Profit from Vaccine Companies
Looking ahead, Bessent stated that the administration aims to launch the fund within the next year. Additionally, Lutnick suggested that beyond TikTok, the fund could be used to secure profitable government stakes in vaccine manufacturers. “The extraordinary size and scale of the U.S. government and the business it does with companies should create value for American citizens,” Lutnick told reporters.
Legal Battles Over TikTok and Potential Buyers
A federal law passed last April required ByteDance to divest its TikTok holdings or face a U.S. ban. Though former President Biden signed the law, legal challenges quickly followed. Eventually, the Supreme Court upheld the statute last month. After taking office, Trump paused enforcement for 75 days, allowing more time for a sale agreement.
Meanwhile, several high-profile investors, including billionaire Frank McCourt and former Treasury Secretary Steven Mnuchin, have expressed interest in purchasing TikTok’s U.S. operations. Furthermore, Trump mentioned that “many people” have privately reached out about the deal, including Microsoft, which is reportedly considering a bid.
AI Startup Proposes U.S. Government Ownership
Last month, Perplexity AI, a San Francisco-based artificial intelligence startup, proposed a deal to ByteDance. According to the plan, the U.S. government would own up to 50% of a new entity combining TikTok’s U.S. operations with Perplexity’s business. If the deal moves forward, this entity could go public with an estimated valuation of at least $300 billion, giving the U.S. a substantial financial stake.
Looking Ahead
With legal deadlines approaching and ongoing negotiations, the future of TikTok in the U.S. remains uncertain. Nevertheless, Trump’s push for a sovereign wealth fund signals a broader strategy to leverage national assets for economic gain. Whether the plan secures congressional approval and materializes into a functioning investment fund remains to be seen.