It’s kind of wild that the United States—the world’s biggest economy—doesn't have a national rainy-day fund. Think about it. Norway has over $1.7 trillion sitting in its piggy bank. Saudi Arabia and the UAE use theirs to buy up everything from golf leagues to silicon chips. Meanwhile, Uncle Sam has mostly just been running a tab.
But things are shifting. Fast.
In early 2025, the idea of a US sovereign wealth fund went from a "maybe someday" academic theory to a "happening now" executive priority. President Trump signed an executive order on February 3, 2025, basically telling the Treasury and Commerce departments to figure out a plan. The goal? To build a fund that makes America more than just a consumer, but a strategic owner.
What a US Sovereign Wealth Fund Actually Is (and Isn't)
Most people hear "sovereign wealth fund" and think of oil money. That’s because countries like Norway and Kuwait fund their massive accounts with petroleum exports. America is a bit of an odd duck here. We produce a ton of oil, but we also spend more than we make. We have a massive deficit. So, you can’t exactly fund this thing with "extra" cash because, honestly, there isn't any.
Instead, the current vision for a US sovereign wealth fund is less about saving for a rainy day and more about strategic muscle. It’s about "sovereign capital."
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Treasury Secretary Scott Bessent has hinted at a "decentralized" model. This isn't necessarily one giant bank account in D.C. It’s more of an industrial strategy. Think of it like this: the government uses its power to de-risk big projects, taking equity stakes in things like rare earth mining or AI data centers.
Where is the Money Coming From?
This is the trillion-dollar question. If you don't have a budget surplus, how do you start a fund?
- The Asset Swap: The federal government owns a lot of stuff. We’re talking $5.7 trillion in direct assets—buildings, land, and mineral rights. One idea is to "monetize" these. Basically, you turn physical land or resources into a financial portfolio.
- Tariff Revenue: There’s been talk of routing money from new tariffs into the fund.
- The "Golden Share" Model: Instead of just buying stocks, the US could get "warrants" or equity in exchange for government contracts. If a company wants a massive deal to build 6G towers or vaccines, the US might say, "Sure, but we want a 5% stake in your company."
- Co-investment: This is the clever bit. By partnering with private equity or even other friendly nations (like the $550 billion deal discussed with Japan), the US can move billions without having to put up all the cash itself.
The Alaska Blueprint
Even though there’s no national fund yet, we’ve actually been doing this at the state level for decades. The Alaska Permanent Fund is the gold standard here. Founded in 1976, it manages over $80 billion.
Alaskans literally get a check in the mail every year—the Permanent Fund Dividend—just for living there. It’s a share of the state’s oil wealth. Texas has something similar with its Permanent School Fund, which uses land and mineral rights to fund education.
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The national debate is basically: "If Alaska can do it, why can't the whole country?"
Why People Are Worried
It’s not all sunshine and dividends. Critics are—to put it mildly—terrified of the "political" side of this.
If the government owns a massive stake in a social media company (there was even talk about the fund being used to buy TikTok), who decides the content policy? If the fund invests in a specific energy company, is that because it’s a good investment, or because the CEO is friends with the current administration?
There’s also the "crowding out" effect. If the government starts buying up shares, does it make it harder for regular investors to find good deals? Some economists, like Larry Summers, have warned that government-led investing can "shake the capitalist logic" that makes the US market work.
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The 2026 Landscape
As we move through 2026, the "unconventional" nature of the US sovereign wealth fund is becoming clear. It’s looking less like a giant savings account and more like a tool for the "AI Race."
We’re seeing the Department of Defense take equity stakes in companies like MP Materials to secure rare earth magnets. We're seeing the "Stargate" initiative—a $500 billion AI infrastructure project—looking for government partnership.
What You Should Watch For
- Legislative Hurdles: Executive orders are one thing, but for a fund to have real staying power (and a separate legal personality), Congress has to weigh in. Watch the House Appropriations Committee for any movement on "Financial Services" bills that might house these assets.
- The "TikTok" Precedent: If the US government actually takes a "golden share" or equity stake in a major tech platform, it changes the rules of the game for every other tech company.
- The "Bessent Plan": Keep an eye on Treasury announcements regarding the monetization of federal lands. If they start selling or leasing federal assets to fund the SWF, that's a massive shift in how the US manages its "balance sheet."
Ultimately, the US is trying to play a game that’s been dominated by the Middle East and Asia for decades. It’s a pivot from a "regulatory" state to an "investor" state. Whether it helps pay down the debt or just creates a massive political slush fund is the debate that’s going to dominate the next few years.
Actionable Next Steps
If you're looking to track how this affects your own wallet or the broader economy, start here:
- Monitor Sector ETFs: Keep a close eye on sectors the government deems "strategic"—specifically semiconductors, rare earth minerals, and AI infrastructure. These are the likely targets for sovereign investment.
- Check State Fund Performance: If you live in a state like Alaska, Texas, or New Mexico, look at how your state-level sovereign funds are performing. They are often the "canaries in the coal mine" for how these strategies work in the US.
- Review Treasury Reports: The US Treasury is required to release updates on the "plan for the establishment" of the fund. Look for mentions of "monetizing federal assets" to see which industries might be impacted by privatization.