Locator: 49271SWF.
AI prompt: is the Trump administration establishing an American sovereign wealth fund by taking a stake in American companies?
AI reply: yes.
Following President Donald Trump's executive order in February 2025, the administration began laying the groundwork for a U.S. sovereign wealth fund (SWF).The plan includes the potential for the U.S. government to take equity stakes in American companies, a strategy that has already been implemented with Intel.
Timeline of events
February 3, 2025: President Trump signed an executive order instructing the Secretaries of the Treasury and Commerce to develop a plan for creating a U.S. sovereign wealth fund within 90 days. The order broadly stated the fund's purpose was to "establish economic security for future generations" and promote U.S. economic leadership.
August 25, 2025: National Economic Council Director Kevin Hassett confirmed the government's acquisition of a nearly 10% equity stake in chipmaker Intel. The stake was acquired using funding from the CHIPS and Science Act, and Hassett described it as a "down payment" on a future sovereign wealth fund.
August 2025: The government's stake in Intel and potential future deals were presented as part of a broader strategy. Hassett suggested that the government could take similar equity stakes in other companies as a condition for receiving federal funds, rather than simply providing grants.
August/October 2025: Following discussions about funding the SWF, sources indicated that the administration has since shifted its focus away from a traditional sovereign wealth fund. Instead, it now plans to use other entities, such as the International Development Finance Corporation (DFC) and a Commerce Department-run "Investment Accelerator," to target strategic deals in sectors like pharmaceuticals, AI, energy, and mining.
Potential funding mechanisms
One of the main questions surrounding the fund was how it would be financed, given the U.S. budget deficit. Potential revenue streams discussed included:
Tariff revenue: Revenue from newly imposed or future tariffs.
Sale of public lands: A controversial proposal that drew criticism from opponents.
Issuing debt:
For-profit stakes in companies: Taking equity in companies that receive federal funding, as was done with Intel.
Shift away from a traditional fund
While initially pursuing a traditional SWF, recent reports indicate the administration has pivoted to alternative mechanisms.The focus is now on using entities like the DFC and a new Commerce Department Investment Accelerator to pursue strategic investments in key industries.
These entities, like a sovereign wealth fund, are designed to leverage government resources to shape economic outcomes but may not have the same structure or scale as initially envisioned.
