President Donald Trump has initiated plans for a U.S. sovereign wealth fund that aims to secure a significant stake in TikTok. This fund is intended to generate investment revenue while addressing national security concerns regarding foreign-owned technology platforms. Trump has enlisted key advisors to facilitate its development, projecting a timeline for establishment within the year.

On February 3, 2025, President Donald Trump signed an executive order aimed at initiating a U.S. sovereign wealth fund potentially capable of acquiring a significant stake in TikTok, which is owned by the Chinese company ByteDance. This order seeks an American buyer for the app and allows until early April for any such arrangements to materialize. Trump suggested that TikTok could serve as a prominent example within the new fund, which, he asserts, could also attract investments from wealthy individuals.

The proposed sovereign wealth fund would primarily invest in various assets; however, its establishment hinges on securing financial surpluses—which the U.S. currently lacks. Trump expressed confidence that this fund could eventually rival other countries’ sovereign wealth funds, including those of Saudi Arabia and Norway. As noted, the U.S. has over 20 smaller sovereign wealth funds at the state level, primarily funded by revenues from natural resources.

Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been tasked with laying the groundwork for the fund, which will likely require the approval of Congress. Previous efforts by the Biden administration to create a sovereign wealth fund for national security did not yield substantive follow-up actions before its conclusion last month. Currently, the goal is to establish the fund within the next year, with potential investments in various sectors, including pharmaceutical companies.

The initiative follows recent legal developments, where a federal law aimed at banning TikTok unless ByteDance divested its interests was upheld. After being coerced into a ban during Trump’s earlier term, he directed the Justice Department to delay law enforcement, granting TikTok additional time to negotiate with the administration. Potential investors, including significant names such as Frank McCourt and former Treasury Secretary Steven Mnuchin, have shown interest in acquiring TikTok, with Microsoft also cited as a possible buyer.

A proposal from Perplexity AI suggests a collaboration allowing U.S. government ownership of up to 50% stake in a new entity combining TikTok with its technology. Should this proposal succeed, it could result in substantial ownership valued at around 300 billion dollars upon an initial public offering. Trump’s initiative illustrates his continued advocacy for American interests in global technology markets.

The establishment of a U.S. sovereign wealth fund reflects a growing interest in national economic strategy and asset management, particularly concerning foreign-owned businesses. The executive order by President Trump aims to explore options that would allow the U.S. to profit from investments in major technology platforms like TikTok. This move is contextualized within broader discussions about national security, economic independence, and the regulation of foreign influence in domestic digital markets, especially concerning tech giants from China.

In summary, President Trump’s executive order to create a U.S. sovereign wealth fund aims to facilitate American investment opportunities in platforms like TikTok while positioning the U.S. to benefit from market stakes. By leveraging potential investments in technology and pharmaceuticals, the initiative underscores a strategic pivot towards national economic empowerment. However, successful implementation will depend on congressional support and the ability to generate necessary funding for the proposed fund.

Original Source: apnews.com

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