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

President Donald Trump has signed an executive order to establish a U.S. sovereign wealth fund, aiming to secure a 50% stake in TikTok, the popular social media platform owned by China’s ByteDance. The administration has set an early April deadline for TikTok to find an approved American partner or buyer.

Sovereign wealth funds are state-owned investment entities that manage assets such as stocks, bonds, and real estate. Globally, over 90 such funds manage more than $8 trillion in assets. The U.S. currently lacks a federal sovereign wealth fund, though more than 20 exist at the state level, funded primarily through revenues from natural resources.

Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been tasked with developing the fund’s framework, with a plan due within 90 days. The administration aims to have the fund operational within the next 12 months. Potential uses for the fund include acquiring stakes in companies like TikTok and investing in vaccine manufacturers.

This move follows the Protecting Americans from Foreign Adversary Controlled Applications Act, passed in April 2024, which mandates that ByteDance divest its stakes in TikTok or face a ban. The law was upheld by the Supreme Court last month. After taking office, President Trump paused the law’s enforcement for 75 days, giving TikTok more time to negotiate a deal.

Several investors, including billionaire Frank McCourt and former Treasury Secretary Steven Mnuchin, have expressed interest in acquiring TikTok’s U.S. platform. Microsoft has also been identified as a potential buyer. San Francisco AI startup Perplexity AI proposed a plan for the U.S. to own up to 50% of a TikTok-Perplexity entity.

The creation of a U.S. sovereign wealth fund represents a significant shift in the nation’s economic strategy, with the potential to manage substantial assets for the benefit of American citizens.

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