American President Donald Trump signed an executive order on Monday to create a U.S. Sovereign Wealth Fund, which could potentially acquire TikTok. Earlier reports indicated that the U.S. government had discussions with several parties, including Oracle (ORCL), about acquiring the Chinese video-sharing app. Trump has also stated that he expects to make a decision on the app’s future in February.
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TikTok’s Future Hangs in the Balance
TikTok’s future hangs in the balance after being temporarily shut down due to a law requiring ByteDance to sell the app or face a ban over security concerns. After taking office on January 20, President Trump signed an executive order extending the deadline by 75 days, giving TikTok more time to decide whether to cease its U.S. operations or sell the platform.
Trump recently said he’s willing to negotiate a deal for TikTok, but only if it’s a good deal. Otherwise, the app could be part of the new U.S. sovereign wealth fund. Generally, these funds use a country’s budget surplus to make investments. Countries in the Middle East and Asia have set up similar funds to invest government money directly.
In his latest executive order, Trump has instructed officials to present a plan for the proposed sovereign wealth fund within 90 days. This plan should include recommendations on funding sources, investment strategies, fund structure, and governance.
TikTok vs. U.S. Social Media Powerhouses
TikTok boasts a massive 170 million users in the U.S. and is in direct competition with other popular platforms like Meta’s (META) Instagram Reels, Alphabet’s (GOOGL) YouTube Shorts, Snapchat (SNAP), and Elon Musk-owned X (formerly Twitter).
Even though these platforms have improved privacy measures, they can’t compete with TikTok’s highly engaging user experience. YouTube Shorts feels awkward and forced compared to TikTok’s smooth interface. Similarly, Instagram Reels falls short in replicating TikTok’s surprisingly accurate content suggestions, despite Meta’s significant investment.
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