President Donald Trump said Monday that TikTok could be acquired by a newly proposed US sovereign wealth fund.
The statement was light on details, but Trump said that TikTok could be “put in” the possible sovereign wealth fund, to preserve access to the popular short-form video app in the United States.
“Other countries have sovereign wealth funds,” Trump said, as he signed an executive order directing American officials to set up such a fund in the United States, modeled after state-owned investment funds in countries such as Norway and Saudi Arabia, which direct their national budgets into financial assets such as stocks, bonds and real estate.
“As an example, TikTok, we’re going to be doing something, perhaps, with TikTok and perhaps not. If we make the right deal, we’ll do it. Otherwise we won’t,” Trump said. “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.”
The suggestion comes as TikTok is under pressure to find a new owner by April, after Trump signed a 75-day extension to the law that requires the app to be sold off from its China-based parent company ByteDance or be banned in the United States.
Trump has pledged to help work out a deal to ensure the app remains accessible to its 170 million American users. He previously said the United States could take a “50 percent ownership position” in a joint venture, potentially with TikTok’s existing owners or new owners.
But standing up a sovereign wealth fund and then using that fund to acquire the platform is unlikely to happen anytime soon, and TikTok’s deadline for working out a deal is quickly approaching. It’s not clear who would run it or whether it could gather the tens of billions of dollars estimated to be needed to buy the platform.
What’s more, an acquisition of TikTok by the US government could raise some tricky questions, including how the platform would be managed.
TikTok did not immediately respond to a request for comment.
Technically, the proposal could work under the bounds of the sell-or-ban law passed with broad bipartisan support in Congress and signed into law last year by former President Joe Biden. For a deal to satisfy the letter of the law, ByteDance can hold no greater than a 20 percent share in TikTok and there “can be no operational relationship between TikTok and ByteDance going forward,” according to Alan Rozenshtein, a professor at the University of Minnesota Law School who specializes in tech law.
He added that ByteDance would also have to hand over full control of the TikTok algorithm — which both the company and Chinese officials have previously said they would oppose doing.
“That would satisfy the divestment concerns” that motivated Congress to pass the law, Rozenshtein told CNN in an interview last week.
However, if the US government takes a large ownership stake in TikTok, the app could “become ungovernable” because of First Amendment protections that could restrict the government from cracking down on — or even, potentially, promoting and demoting through an algorithm — certain types of speech.
“This gets very complicated very quickly,” Rozenshtein said.
And even if the US government did manage to acquire some or all of TikTok, there’s no guarantee the app’s American users — who have long been skeptical of the government’s motivations in trying to force a sale of TikTok and have been frustrated by months of uncertainty over the possible ban — would remain on the app. If users abandon the platform, advertisers would likely follow, potentially undermining such an investment.
“I don’t know about y’all but I don’t think too many people want to be on a platform that is being owned by the government, that is obviously being monitored by the government. I don’t think nobody wants that,” one user said in a video last week.
Another user worried that a US acquisition of TikTok could “change what we’re allowed to say, who we’re allowed to criticize.”
“It is absolutely f***ing dystopian to be saying out loud, that the US government, that we want the feds owning our social media. Why is the government owning social media? This seems like a big no-no,” they said.
