
By Gage Skidmore from Peoria, AZ, United States of America
President Donald Trump executed an executive order instructing the United States to initiate the development of a government-owned investment fund on Monday. He indicated that this fund could potentially generate profits from TikTok, contingent upon his success in identifying an American buyer.
On his first day in office, Trump had signed an order allowing TikTok until early April to secure an approved partner or buyer. He has expressed a desire for the U.S. to acquire a 50% interest in the prominent social media platform. During a statement in the Oval Office on Monday, he noted that TikTok, which is owned by the China-based company ByteDance, could serve as a model for inclusion in a new U.S. sovereign wealth fund.
“We might incorporate that into the sovereign wealth fund, depending on our earnings or through a partnership with affluent investors; there are numerous possibilities,” he remarked regarding TikTok. “It could serve as a prime example within the fund, alongside many other assets we could consider.”
Sovereign wealth funds allocate capital to various assets, including equities, fixed-income securities, and real estate. These funds are generally financed by the budgetary surpluses of a nation, a situation that the United States currently does not experience.
Former President Trump remarked that numerous other countries possess such investment funds and expressed optimism that the U.S. could eventually surpass the size of Saudi Arabia’s fund. “Eventually we’ll catch it,” he asserted.
According to The International Forum of Sovereign Wealth Funds, a London-based organization comprising approximately 50 of these entities, there are over 90 sovereign wealth funds globally managing assets exceeding $8 trillion.
In the United States, more than 20 sovereign wealth funds operate at the state level, as indicated by research from the Center for Global Development, a nonpartisan think tank based in Washington, D.C.
The largest of these funds, located in Alaska, New Mexico, and Texas, are funded by revenues generated from oil, gas, and mineral resources, which are utilized to support state programs, including education. Although these funds are government-owned, they typically function as independent entities with distinct investment strategies and dedicated personnel, as noted by the center.
The president has appointed Treasury Secretary Scott Bessent and Howard Lutnick, who is Trump’s nominee for commerce secretary, to spearhead the establishment of a fund that will likely necessitate congressional approval. According to the executive order, a comprehensive plan for the fund, which must include investment strategy recommendations and a governance framework, is to be presented to Trump within a 90-day timeframe.
The previous administration under former President Joe Biden had explored the concept of a sovereign wealth fund aimed at national security investments; however, this initiative did not progress to any definitive actions prior to his departure from office last month.
Bessent indicated that the administration aims to launch the fund within the next year, while Lutnick suggested that one potential application of the fund could involve the government acquiring a profit-generating stake in vaccine manufacturers.
Lutnick remarked to reporters that the vast scale and scope of the U.S. government’s dealings with various companies should ultimately generate value for American citizens.
TikTok was anticipated to face a ban in the United States last month due to a federal law mandating that ByteDance divest its interests or confront a prohibition. This legislation, which received bipartisan support in Congress, was enacted in April and subsequently signed by President Biden. In response, both TikTok and several users swiftly initiated legal proceedings against the law, which was ultimately upheld by the Supreme Court last month.
Following his inauguration, President Trump, who had previously sought to prohibit the widely-used app during his first term, instructed the Justice Department to suspend enforcement of the law for a period of 75 days. This extension has provided the company with additional time to negotiate a potential agreement with the administration.
Numerous investors, including billionaire Frank McCourt and former Treasury Secretary Steven Mnuchin, have publicly expressed their interest in acquiring TikTok’s U.S. operations. Trump has indicated that “many people” have also contacted him privately regarding this matter. Recently, he mentioned that Microsoft is among the U.S. companies considering an acquisition of the social media platform.
A San Francisco-based artificial intelligence startup, Perplexity AI, submitted a proposal to ByteDance last month, which would enable the U.S. government to hold up to a 50% ownership stake in a new entity that merges TikTok’s U.S. operations with Perplexity’s business. According to a source familiar with the situation, if this proposal is successful, it would allow the U.S. government to acquire a significant stake in the entity upon its initial public offering, projected to be at least $300 billion.