On Monday, former President Donald Trump signed an executive order directing the U.S. government to explore the creation of a sovereign wealth fund that could potentially include profits from TikTok if an American buyer is found for the platform. The executive order, signed on Trump’s first day back in office, sets a deadline of early April for ByteDance, TikTok’s China-based parent company, to divest its U.S. operations or face a ban.
Trump has proposed that the U.S. government take a 50% stake in TikTok, suggesting that it could serve as an asset within a newly established sovereign wealth fund. He stated that this fund could also include other investments, possibly in partnership with wealthy private investors. Sovereign wealth funds, typically funded by budget surpluses, invest in various assets such as stocks, bonds, and real estate. While the U.S. currently lacks a federal sovereign wealth fund, Trump noted that many countries operate such entities and expressed confidence that the U.S. could eventually surpass Saudi Arabia’s fund.
Globally, more than 90 sovereign wealth funds manage over $8 trillion in assets, according to the International Forum of Sovereign Wealth Funds. In the U.S., over 20 state-level sovereign wealth funds exist, with the largest ones in Alaska, New Mexico, and Texas. These funds are typically financed by revenues from oil, gas, and mineral resources and are used to support public programs such as education.
Trump has appointed Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to oversee the development of the proposed federal wealth fund. The executive order mandates that within 90 days, they present a plan outlining investment strategies and governance structures, though congressional approval would likely be required.
The Biden administration had previously explored a sovereign wealth fund for national security investments, but no concrete action was taken. Bessent stated the goal is to launch the fund within a year, while Lutnick suggested it could also include profit-earning stakes in vaccine manufacturers.
Legal challenges had initially delayed TikTok’s ban, which was mandated by a bipartisan law passed in April 2024. After taking office, Trump paused enforcement for 75 days, allowing additional time for negotiations. Several investors, including former Treasury Secretary Steven Mnuchin and billionaire Frank McCourt, have expressed interest in acquiring TikTok’s U.S. operations.
San Francisco-based AI startup Perplexity AI has also proposed a deal that could allow the U.S. government to own up to 50% of a new entity combining TikTok’s U.S. platform with its own business. If successful, the entity could launch an initial public offering valued at a minimum of $300 billion.