US President Donald Trump signed an executive order Monday (February 3) to establish a sovereign wealth fund for the country, with a potential focus on the acquisition of TikTok.
The move would create a government-backed investment vehicle similar to those operated by resource-rich countries like Saudi Arabia and Norway. Sovereign wealth funds typically invest surplus revenues in global projects, financial products, and corporate stakes, generating long-term financial benefits to support national budgets, social programs, and infrastructure development.
Unlike pension funds, which cater to individual retirement needs, SWFs are designed to serve the collective good of a nation.
The White House highlighted the fund’s potential “to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally.”
The Trump administration could leverage the sovereign wealth fund to directly acquire or take a stake in TikTok. Speaking to reporters in the Oval Office, Trump hinted at the fund’s potential role in the TikTok transaction, stating, “I have the right to do that, and we might put that in the sovereign wealth fund, whatever we make, or if we do a partnership with very wealthy people, a lot of options, but we could put that as an example in the fund.”
“I have the right to do that, and we might put that in the sovereign wealth fund, whatever we make, or if we do a partnership with very wealthy people.”
Donald Trump, US PResident
The proposed fund could allow the US government to assume control of TikTok’s domestic operations, addressing national security concerns while maintaining the platform’s presence in the US market. TikTok has faced intense scrutiny from the Biden administration, which sought to ban the app in the US unless its parent company ByteDance secures a non-Chinese buyer. An earlier executive order by Trump extended TikTok’s operational timeline in the US, creating a window for potential acquisition or restructuring.
Trump said he wants the US wealth fund to rank among the largest globally, The New York Times reported, citing the president’s remarks at the Oval Office. “And I think in a short period of time, we’d have one of the biggest funds. And you know, some of some of them are pretty large,” Trump said. “So, that’s a big deal, huh?”
Norway’s Norway Government Pension Fund Global, the largest such fund in the world, has $1.76 trillion in total assets, according to the Sovereign Wealth Fund Institute. China Investment Corp. has $1.35 trillion in assets, while the Abu Dhabi Investment Authority has $1.09 trillion.
Sovereign wealth funds are traditionally associated with countries that have substantial budget surpluses or significant natural resource revenues. However, the US consistently runs budget deficits. For fiscal 2024, the Treasury Department reported that the US budget deficit amounted to $1.833 trillion, the third-largest on record and the highest outside of the COVID-19 era.
Unlike a current account surplus, where a country earns more from exports and investments than it spends on imports and foreign obligations, a current account deficit occurs when a nation spends more on imports, foreign investments, and transfers than it earns from exports and other transfers.
“I think in a short period of time, we’d have one of the biggest funds. And you know, some of some of them are pretty large.”
Donald Trump, US PResident
The US’s current account deficit ballooned to an all-time high of $310.9 billion in calendar Q3 2024. The deficit reached 4.2% of US GDP, marking the highest level since the first quarter of 2022 and an increase from 3.7% in the second quarter of 2024. Historically, the country’s deficit peaked at 6.3% of GDP in the third quarter of 2006, during the early stages of the housing market boom’s decline.
Treasury Secretary Scott Bessent told reporters that the sovereign wealth fund would be established within the next 12 months.
“We’re going to monetize the asset side of the US balance sheet for the American people,” Bessent was quoted by Reuters as saying. “There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”
The establishment of a US sovereign wealth fund marks a significant shift in federal economic policy, with TikTok potentially serving as its first major investment target.
The entertainment industry has seen significant investments from sovereign wealth funds in recent years. Singapore’s Temasek has backed companies like SoundCloud and Creative Artists Agency (CAA), while GIC, another Singaporean fund, holds a stake in South Korea’s Kakao Entertainment, which owns a significant share of K-Pop agency SM Entertainment.
Saudi Arabia’s Public Investment Fund has also invested in Kakao Entertainment and Live Nation Entertainment. However, the Saudi fund completely divested its position in Live Nation in November 2024, capping off a highly profitable investment that more than tripled in value since the early days of the pandemic.
Last month, Temasek was reported to be interested in buying Blackstone’s rights to Bob Dylan and Adele songs, which could reportedly fetch $3 billion or more.
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