The president said he ‘might’ put the Chinese-owned social media giant, which is supposed to be banned in the US, in the new fund, which would require congressional approval
President Donald Trump has issued an executive order that paves the way for the US to explore creating a sovereign wealth fund.
This government-owned investment vehicle could potentially be used to profit from TikTok, should Trump succeed in securing an American buyer for the platform. Having already granted TikTok an extension until early April to find a suitable partner or buyer, Trump expressed his desire for the US to acquire a 50% stake in the social media giant.
Speaking from the Oval Office, he floated the idea of placing TikTok in a new US sovereign wealth fund, alongside other valuable assets. “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,” he mused, highlighting the potential for the fund to hold a diverse range of investments.
Sovereign wealth funds typically invest in assets such as stocks, bonds, and real estate, often drawing on a country’s budgetary surpluses – although the US currently lacks such surpluses. Trump pointed to the numerous countries that already operate sovereign wealth funds, voicing his ambition for the US to eventually surpass Saudi Arabia’s fund in size.
“Eventually we’ll catch it,” he vowed. With over 90 sovereign wealth funds worldwide managing assets worth over $8trn, according to the International Forum of Sovereign Wealth Funds, the US is now taking steps to join their ranks.
In the United States, over 20 sovereign wealth funds are operational at the state level, as per an analysis by the Center for Global Development, a nonpartisan think-tank based in Washington. The largest of these funds, located in Alaska, New Mexico and Texas, are financed through revenues generated from oil, gas and mineral proceeds and are utilised to support in-state programmes such as education.
Despite being government-owned, these funds typically function as independent entities with their own investment strategies and personnel, according to the center. President Trump has tasked Treasury Secretary Scott Bessent and Howard Lutnick, his choice for commerce secretary, with laying the foundation for establishing this fund, which would likely necessitate congressional approval.
The executive order stipulates that a plan for the fund, including suggestions for investment strategies and a governance model, must be submitted to Trump within 90 days. The administration of former President Joe Biden had explored the possibility of creating a sovereign wealth fund for national security investments, but no concrete action was taken before he left office last month.
Bessent stated that the administration aims to have the fund operational within the next 12 months, while Lutnick suggested another potential use for the fund could be for the government to acquire a profit-earning stake 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 stated to the press. TikTok was on the verge of being axed in the States last month, as per a federal law that would force ByteDance to sell off its American interests or get banned.
Passed in April with support from both sides of Congress and the signature of President Biden, the act didn’t fly with everyone—both companies and some users fought back legally. Their efforts were in vain, though, as the Supreme Court confirmed the statute’s legality just last month.
After stepping into the Oval Office, Trump—who’d previously attempted to boot the beloved app during his tenure—ordered a halt on enforcing the contentious law for an extra 75 days. This breathing room has allowed more time for TikTok to negotiate with the powers that be.
Several deep-pocketed investors have chattered about their interest in taking over TikTok’s US operations—among them, tycoon Frank McCourt and Trump’s old Treasury Secretary Steven Mnuchin have been vocally keen. Trump himself has mentioned “many people” have been hush-hush about wanting in.
Just last week, he revealed tech titan Microsoft is among the American bigwigs eyeing up the social media giant.
Last month, Perplexity AI, an artificial intelligence startup based in San Francisco, proposed a deal to ByteDance that could see the US government owning up to 50% of a new entity merging TikTok’s US operations with Perplexity’s business, according to a source who spoke to the Associated Press. If this proposal comes to fruition, it would result in the US government holding a significant stake in the newly formed entity, especially if it goes public with an initial offering of at least $300bn.