On Monday, U.S. President Donald Trump signed an executive order directing the U.S. Treasury and Commerce Departments to establish a sovereign wealth fund.

He indicated that this fund could potentially be used to purchase TikTok.

TikTok, which has approximately 170 million American users, was briefly taken offline just before a law took effect on January 19, mandating its Chinese owner, ByteDance, to either sell the app due to national security concerns or face a ban.

After taking office on January 20, President Trump signed an executive order seeking to delay the enforcement of the law by 75 days. He mentioned that he was in discussions with multiple parties regarding the purchase of TikTok and anticipated making a decision about the app’s future in February.

What Is a Sovereign Wealth Fund?

A Sovereign Wealth Fund (SWF) is a state-owned investment fund comprised of assets such as stocks, bonds, real estate, or other financial instruments. These funds are typically established by governments to achieve specific economic objectives and are often generated from budgetary surpluses, foreign currency operations, proceeds from privatizations, governmental transfer payments and revenue generated from resource exports.

Key characteristics and purposes of Sovereign Wealth Funds include:

  • Stabilization Fund: To insulate the national budget and economy from commodity price swings or economic shocks.
  • Savings Fund: To build wealth over the long term, particularly for future generations.
  • Pension Reserve Fund: To cover future pension liabilities and ensure long-term fiscal health.
  • Development Fund: To fund social and economic development projects like infrastructure or education.
  • Strategic Investment Fund: To influence or acquire strategic assets that can benefit national interests.

Examples of prominent sovereign wealth funds include Norway’s Government Pension Fund Global, Abu Dhabi Investment Authority and China’s China Investment Corporation.

More to follow.

On Monday, U.S. President Donald Trump signed an executive order directing the U.S. Treasury and Commerce Departments to establish a sovereign wealth fund.

Update: 2/3/25, 1:19 p.m. ET: This article has been updated with additional information.