On Monday, President Donald Trump signed an executive order instructing the U.S. Treasury and Commerce departments to begin the process of establishing a sovereign wealth fund.

Treasury Secretary Scott Bessent anticipates that the fund could be operational within the next year, with the objective of financing significant government projects and strategic investments in key areas such as supply chains.

Trump indicated that the fund could be utilized for substantial infrastructure initiatives, including highways and airports, as well as investments in cutting-edge defense capabilities and medical research.

The president mentioned the potential of using the fund to facilitate the acquisition of TikTok, suggesting that it might involve either a direct purchase or a collaboration with affluent individuals.

Though he did not provide specific details, he stressed that the success of the deal would hinge on the right arrangement.

Trump has previously mentioned a joint venture where the U.S. would take a 50 percent ownership stake in TikTok, although this proposition has sparked concerns regarding its legality.

Additionally, Howard Lutnick, Trump's nominee for Commerce Secretary, proposed that the sovereign wealth fund could also invest in companies with significant government contracts, including those connected to COVID-19 vaccine production.

This proposal follows similar considerations among Democrats, who have also contemplated the establishment of a sovereign wealth fund.

Sovereign wealth funds are substantial capital pools owned by governments that have played a vital role in global investments, especially in the Middle East and Europe.

However, uncertainty lingers regarding how the timeline for the new U.S. fund correlates with ongoing efforts to resolve the status of TikTok, which faces scrutiny over national security issues.

The White House has yet to release additional information about the executive order.