Trump Proposes U.S. Sovereign Fund, Eyes TikTok Stake \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ President Donald Trump signed an executive order Monday to begin developing a U.S. sovereign wealth fund, which he suggested could profit from TikTok if the Chinese-owned app is sold to an American buyer. The fund, overseen by Treasury and Commerce, would require Congressional approval and could invest in major industries, including tech and pharmaceuticals. Trump has also paused TikTok’s federal ban for 75 days, giving ByteDance time to negotiate a deal.
Trump TikTok Executive Order: Quick Looks
- U.S. Sovereign Wealth Fund Proposed: Trump signed an order to develop a government-owned investment fund, suggesting it could profit from a TikTok sale.
- TikTok Ban Delayed: The federal ban on TikTok has been paused for 75 days, giving ByteDance more time to find a U.S. buyer.
- Trump Seeks 50% U.S. Stake: Trump wants the U.S. government to own up to 50% of TikTok if a deal is reached.
- Potential TikTok Buyers: Microsoft, Frank McCourt, and Steven Mnuchin have expressed interest in acquiring TikTok’s U.S. operations.
- Congressional Approval Needed: The sovereign wealth fund proposal would require Congress to sign off before becoming official.
Deep Look
President Donald Trump on Monday signed an executive order directing his administration to begin laying the groundwork for a U.S. sovereign wealth fund, a government-owned investment entity that he said could profit from the sale of TikTok if the social media platform is forced to divest its U.S. operations.
Trump, speaking in the Oval Office, described the concept as a way for the U.S. government to generate wealth through strategic investments, citing TikTok as a potential first asset.
“We might put that in the sovereign wealth fund, whatever we make or we do a partnership with very wealthy people—there are a lot of options,” Trump said.
Trump’s Plan to Profit from TikTok
Trump’s executive order extends a previous directive that gives ByteDance, TikTok’s China-based parent company, until early April to find an approved American buyer or face a complete U.S. ban.
While previous administrations have considered TikTok’s national security risks, Trump has gone a step further by demanding that the U.S. take a 50% ownership stake in the platform if a deal is struck.
The president pointed to sovereign wealth funds in Saudi Arabia and Norway as examples of how governments can invest in key industries.
“Eventually, we’ll catch Saudi Arabia’s fund size,” Trump said, expressing confidence in the U.S.’s ability to generate revenue through government-led investments.
What Is a Sovereign Wealth Fund, and How Would It Work?
A sovereign wealth fund is a government-owned investment pool that invests in stocks, bonds, real estate, and other assets to generate profit. Most sovereign funds are financed by surplus revenue—something the U.S. currently lacks due to its national debt.
There are already more than 20 sovereign wealth funds at the state level in the U.S., with the largest ones in Alaska, Texas, and New Mexico, primarily funded by oil and gas revenues.
Trump envisions a federal-level sovereign wealth fund that would be run by the Treasury Department and the Commerce Department, with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick leading the effort.
Congressional Approval Needed
Unlike state-level funds, Trump’s proposed sovereign wealth fund would require Congressional approval, making its future far from certain.
Former President Joe Biden’s administration had previously explored the idea of a sovereign wealth fund focused on national security investments, but it never moved forward.
Bessent said the administration’s goal is to launch the fund within 12 months, while Lutnick suggested that it could be used to secure government stakes in other high-value industries, such as vaccine manufacturing.
“The extraordinary size and scale of the U.S. government and the business it does with companies should create value for American citizens,” Lutnick said.
TikTok Ban Paused as Negotiations Continue
Trump’s executive order also paused enforcement of a federal law that was set to ban TikTok last month if ByteDance failed to divest. The ban, which was passed in April 2024 with bipartisan Congressional support and signed by Biden, was challenged in court and upheld by the Supreme Court.
However, Trump directed the Justice Department to delay enforcement for 75 days, giving ByteDance additional time to find a U.S. buyer or negotiate a deal.
Potential TikTok Buyers Emerge
Several investors have expressed interest in purchasing TikTok’s U.S. operations, including:
- Frank McCourt, billionaire businessman
- Steven Mnuchin, Trump’s former Treasury Secretary
- Microsoft, which Trump confirmed is among the companies considering a bid
Additionally, a San Francisco-based AI startup, Perplexity AI, has proposed a deal that would allow the U.S. government to own up to 50% of a TikTok-Perplexity merger once the new entity goes public. The deal would value the combined company at over $300 billion.
The Broader Impact: Is the U.S. Moving Toward Government-Owned Investments?
Trump’s push for a sovereign wealth fund marks a major shift in U.S. economic policy, potentially signaling greater government involvement in private-sector investments.
Key questions remain:
- Will Congress approve the creation of a U.S. sovereign wealth fund?
- Will the U.S. government take a stake in TikTok?
- Could this open the door for government investments in other industries?
For now, Trump’s executive order has put TikTok’s future back in the spotlight, raising economic, political, and legal questions about the role of government in private-sector profits.
Conclusion: A Game-Changing Move or Political Gamble?
Trump’s plan to launch a U.S. sovereign wealth fund—with TikTok as a potential first asset—is a bold and controversial proposal.
While Trump claims it could generate wealth for American citizens, critics warn that it raises significant regulatory and economic concerns about government intervention in the private sector.
With the TikTok sale deadline approaching and Congress needing to approve the fund, the coming months will be crucial in determining whether Trump’s vision becomes reality.
One thing is certain: the battle over TikTok is far from over.
Trump Proposes U.S. Trump Proposes U.S.
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