Trump Initiates U.S. Sovereign Wealth Fund, Eyes TikTok Ownership

Trump Orders the Creation of a U.S. Sovereign Wealth Fund

On his first day back in office, President Donald Trump signed an executive order instructing the U.S. government to begin the process of developing a sovereign wealth fund. He suggested that this fund could be used to profit from TikTok, should his administration succeed in securing an American buyer for the platform.

Trump had already set a deadline for TikTok to secure an approved buyer or partner by early April. He expressed interest in having the U.S. government acquire a 50% stake in the platform, which is currently owned by the China-based ByteDance. Speaking from the Oval Office, Trump highlighted TikTok as a potential asset that could be included in the new sovereign wealth fund.

Sovereign Wealth Fund: A Strategic Move for the U.S.

Trump emphasized that sovereign wealth funds—which invest in assets such as stocks, bonds, and real estate—are common globally. Despite the U.S. lacking budget surpluses to fund such an initiative, Trump predicted that the country’s fund could eventually rival the size of Saudi Arabia’s massive investment fund.

According to the International Forum of Sovereign Wealth Funds, there are more than 90 such funds worldwide, managing assets exceeding $8 trillion.

Existing U.S. Sovereign Wealth Funds at the State Level

While the U.S. government has yet to establish a national sovereign wealth fund, there are more than 20 state-level funds in existence, as analyzed by the Center for Global Development.

The most significant funds—based in Alaska, New Mexico, and Texas—are primarily financed by revenue from oil, gas, and mineral resources. These funds support various state programs, including education. Although government-owned, they operate independently with dedicated investment strategies and management teams.

Treasury and Commerce Departments to Lead the Initiative

To oversee the fund’s development, Trump appointed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. The executive order mandates that they submit a detailed plan—including investment strategies and governance models—within 90 days.

The initiative will likely require Congressional approval before full implementation. Notably, the Biden administration had explored the idea of a sovereign wealth fund for national security investments, though no concrete action was taken before Biden left office.

Fund’s Potential Applications: TikTok and Beyond

Bessent revealed that the government aims to launch the sovereign wealth fund within the next 12 months. Meanwhile, Lutnick suggested that in addition to TikTok, the fund could allow the U.S. government to profit from vaccine manufacturers and other key industries.

He stated, “The extraordinary size and scale of the U.S. government and its business dealings with corporations should generate value for American citizens.”

TikTok’s Legal Battle and Future Prospects

Under an existing law passed in April, ByteDance was required to divest TikTok’s U.S. operations or face a ban. The law, which had bipartisan support, was signed by President Joe Biden but was later challenged in court by TikTok and its users. The Supreme Court ultimately upheld the ruling, allowing the government to enforce the law.

However, after taking office, Trump temporarily paused enforcement for 75 days, giving ByteDance more time to negotiate a sale.

Several high-profile investors—including billionaire Frank McCourt and former Treasury Secretary Steven Mnuchin—have shown interest in acquiring TikTok’s U.S. operations. Trump mentioned that Microsoft is among the American companies considering a bid.

Perplexity AI’s Unique Proposal

A notable proposal came from San Francisco-based AI startup Perplexity AI, which suggested merging TikTok’s U.S. platform with its own business. Under this plan, the U.S. government could own up to 50% of the new entity, which would go public at a valuation of at least $300 billion.

If successful, this approach would allow the U.S. government to maintain a significant stake in TikTok’s U.S. operations, providing a direct financial benefit to the sovereign wealth fund.

Final Thoughts

With Trump’s ambitious vision, the creation of a U.S. sovereign wealth fund could mark a pivotal shift in government investments. While still in its early stages, the initiative has the potential to not only generate revenue but also influence the ownership structure of major tech companies like TikTok.

The coming months will be crucial in determining whether Congress will approve the fund and how it will impact national and global economic landscapes.