Donald Trump Wants to Create a Sovereign Wealth Fund so the U.S. Can Buy TikTok

The never-ending saga over the purchase of TikTok got a new chapter when President Trump signed an executive order in early February that allowed for the creation of a sovereign wealth fund. One of the goals of that fund would reportedly be the purchase of the app, which would make it a state-run media channel.

Following the news that the U.S. government may purchase TikTok through a sovereign wealth fund, many wanted to learn more about what a sovereign wealth fund even is. Here's what we know.

The U.S. has never had a sovereign wealth fund, but other countries, specifically those run by monarchs in countries like Saudi Arabia already use them. Essentially, the fund is designed to be a discretionary investment account that can be used for the benefit of the nation, per Reuters. Funds are withdrawn from the account to support the purchase of everything from TikTok to sports teams, all with the ostensible goal of improving a country's international standing.

The reason the United States has never had a sovereign wealth fund is that the creation of such a fund is probably unconstitutional. The U.S. Constitution says that Congress is responsible for appropriating funds through passing laws, and the creation of such a fund would give the executive a pool of money that they can use without the authority of Congress, essentially bypassing them.

This kind of singular discretion for the executive would allow for some freedom, but it would also mean that the president can use that funding to do anything they want. We might like the idea of the president saving TikTok, but a fund like this allows for the increased possibility of corruption, as there is no oversight mechanism that can credibly account for who is receiving this money.

Although Trump's executive order announced the creation of the fund, details on how it would actually work remain scarce. Typically, a country's surplus budget goes into the fund, but the U.S. is not currently operating at a surplus. Trump has suggested that the proceeds from his tariffs would go into the fund, and Treasury Secretary Scott Bessent said that they planned to monetize assets currently owned by the American government.

Sovereign wealth funds can be absolutely enormous once they're established, with Norway's being worth as much as $1.74 trillion. While Bessent has suggested that the fund will ramp up in the next 12 months, it's unclear whether it will meet legal challenges that might eventually keep it from going into effect.

If the fund does come into existence, it would have to be worth several billion dollars before it had the power to purchase TikTok. And, even if the government did purchase TikTok, it's unclear what that might mean for the platform in practical terms. We don't have a lot of state-run media in the U.S., so that kind of purchase would be a startling shift.