Oil-rich nations have spent decades turning their natural-resource wealth into financial assets, creating some of the world’s largest investment funds in the process. But sovereign wealth funds are no longer simply rainy-day accounts for countries drowning in oil profits. There are now more than 100 of them managing upwards of $16 trillion in assets, according to the International Monetary Fund — and governments increasingly view them as a tool to build industries, finance infrastructure and secure a foothold in emerging technologies.
The Largest Sovereign Wealth Funds
- Norway’s Government Pension Fund Global
- China’s SAFE Investment Company
- China Investment Corporation
- Abu Dhabi Investment Authority
- Kuwait Investment Authority
- Singapore’s GIC Private Limited
- Saudi Arabia’s Public Investment Fund
Now, as artificial intelligence promises to generate enormous wealth while potentially displacing millions of workers, some policymakers and tech leaders are asking whether the United States should use a sovereign wealth fund to give the public a stake in AI’s gains.
In this article, we’ll break down what a sovereign wealth fund is, the different ways they’re used and how it could reward American citizens with a cut of AI industry profits.
What Is a Sovereign Wealth Fund?
A sovereign wealth fund is a government-owned investment account designed to grow surplus revenues into larger savings accounts that can provide financial stability and fund strategic initiatives.
Unlike central bank reserves that hold funds for liquidity and stability, sovereign wealth funds are a special purpose fund that seek to generate a return on investment for a specific goal. Developing countries may use them to stabilize their economy, while wealthy nations may focus on long-term savings. While many funds may have started with the goal of stabilizing currencies or saving for the future, they are increasingly used to support strategic initiatives, like economic diversification, infrastructure development or climate change.
Sovereign wealth funds can be funded by numerous sources. For example, Norway, Saudi Arabia and Kuwait, have invested their oil revenues in global markets to diversify their holdings, avoid over-inflating their own economy and preserve their wealth. Other countries invest their trade surpluses, foreign exchange reserves and proceeds from state-owned enterprises.
How the funds are invested depends on the government’s appetite for risk, liquidity needs, investment horizon and any restrictions on international investments. Stocks and bonds are a staple of any investment mix, but according to the IMF, many of the largest funds are increasingly shifting their investments into private equity and direct investments in companies. About one-third of the sovereign wealth transactions tracked in a 2026 IE University study were investments in artificial intelligence companies like OpenAI, xAI and Anthropic.
Types of Sovereign Wealth Funds
Savings Funds
Savings funds are designed to preserve wealth for future generations. They are particularly popular in countries that export oil, gas or minerals, as they hope to convert their finite resources into financial investments that generate returns long after their nonrenewables run out.
Stabilization Funds
Stabilization funds are akin to a rainy day fund, as they aim to protect a country’s economy from market volatility. They are often employed by commodity exporters, like Chile, to protect their budget from the turbulence of commodity markets, or to stabilize the currency during an economic downturn.
Development Funds
Strategic development funds support economic development, infrastructure and strategic industries. They often invest in domestic companies that could help the country gain a foothold in a specific industry, which could bring additional growth, diversification and resiliency to the country’s economy.
Reserve Investment Funds
Reserve investment funds are excess foreign currency reserves beyond those held by a central bank. Rather than holding large amounts of reserves in low-yield accounts, countries like China have established investment subsidiaries with more aggressive investment strategies.
Pension Reserve Funds
Public pension funds, like Social Security, do not count as sovereign wealth funds because they are funded by workers’ contributions. But when a government recognizes that there are more retirees than working-age taxpayers, it may create a pension reserve fund to get ahead of that imbalance. Australia, for example, launched its Future Fund in 2006 thanks to a budget surplus and the proceeds from its sale of Telstra, a formerly state-run telecommunications company.
The World’s Largest Sovereign Wealth Funds
1. Norway’s Government Pension Fund Global
With more than $2.3 trillion in assets under management, Norway’s Government Pension Fund Global is the largest sovereign wealth fund in the world. Established in 1990 as the Government Petroleum Fund, it was designed to store surplus oil revenues for future generations. In 2006, its name was changed to the Government Pension Fund Global. The fund owns a small share in more than 7,000 companies. It also invests in the fixed income and real estate markets.
2. China’s SAFE Investment Company
China’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), operates a Hong Kong-based investment subsidiary. Some experts argue it is not a true sovereign wealth fund because it manages foreign exchange reserves, similar to a central bank. But unlike a central bank, it has taken a direct stake in numerous global companies. Established in 1997, the fund manages more than $1.9 trillion in assets, according to IE University.
3. China Investment Corporation
China Investment Corporation was established in 2007 to diversify China’s foreign exchange holdings. It has more than $1.5 trillion in assets, according to IE University. CIC invests in international assets through its subsidies CIC International and CIC Capital, and it invests in China-owned financial institutions through a third subsidiary, Central Huijin.
4. Abu Dhabi Investment Authority
Abu Dhabi, the capital of the United Arab Emirates, established its sovereign wealth fund, the Abu Dhabi Investment Authority, in 1976. Funded by oil revenue, the fund invests in more than two dozen asset classes, including equities, fixed income, real estate and private equity. The fund has nearly $1.2 trillion in assets under management, according to IE University.
5. Kuwait Investment Authority
The world’s first sovereign wealth fund, the Kuwait Investment Authority was founded in 1953 to save its oil revenue and reduce its reliance on a single finite resource. The fund recently surpassed $1 trillion in assets under management, according to IE University..
6. Singapore’s GIC Private Limited
In 1981, Singapore established the Government of Singapore Investment Corporation, later renamed GIC Private Limited, to manage its foreign exchange reserves. It has $936 billion under management, according to the IE University study. GIC is the largest of Singapore’s two sovereign wealth funds. The second fund, Temasek Holdings, has roughly $323 billion under management. GIC and Temasek have made more deals than any other sovereign wealth fund since 2020, according to the study. A portion of its investment returns are spent on education, healthcare and research and development.
7. Saudi Arabia’s Public Investment Fund
Established in 1971, Saudi Arabia’s Public Investment Fund plays a major role in the country’s economic development, representing 10 percent of its non-oil GDP. With more than $900 billion in assets under management, the company has a majority stake in electric vehicle company Lucid Motors, which opened a factory in the country. The PIF, along with venture capital firms Silver Lake and Affinity Partners, acquired video game developer Electronic Arts (EA) in 2026.
Could an AI Sovereign Wealth Fund Be on the Horizon?
The U.S. government does not manage any sovereign wealth funds, but the idea has been proposed by everyone from President Donald Trump to Senator Bernie Sanders to OpenAI CEO Sam Altman.
Trump first called for the creation of a U.S. sovereign wealth fund in an executive order from February 2025. The order did not specify what the purpose of the fund would be, but it said it would lower taxes, create economic security for future generations and promote the U.S.’s economic leadership on the global stage. An accompanying fact sheet notes that the federal government holds $5.7 trillion in assets, but those assets could not easily be liquidated. Several experts have criticized the plan, though, noting that the federal government does not have a surplus to invest and in fact operates with a deficit.
Trump’s proposed sovereign wealth fund has not been created as of August 2026, but his administration has invested tens of billions of dollars in U.S. companies in exchange for equity shares. Most investments have been in semiconductors, nuclear energy and rare earth minerals — sectors Trump argues are critical to national security and maintaining leadership in artificial intelligence.
The idea of tapping AI’s riches to create a sovereign wealth fund was first proposed by OpenAI in April 2026. As one of its recommended policy solutions to deal with AI’s impact on the economy, the company suggested a Public Wealth Fund could invest in AI companies and distribute the returns to citizens, allowing more people to participate in the upside of AI-driven growth.
Two months later, Sanders, the independent senator from Vermont, introduced legislation to create a sovereign wealth fund that would impose a one-time 50 percent tax on the stock of companies that generate at least $200 million in AI-related revenues. The fund would be managed by an independent commission that would, through its shareholder voting powers, be able to advocate for policies in the best interest of the American people. Based on an estimated market value of $7 trillion, Sanders said a 5 percent annual dividend could distribute a $1,000 payment to everyone in the U.S. Eventually, he said, it could be used to fund health care, education and housing for the American people.
“The foundation of AI is based on the collective knowledge of humanity and the creative work of tens of millions of people,” Sanders said in a news release. “The American people must have the ability to slow it down and make sure that AI benefits humanity, not just the richest people on the planet.”
Sanders’ proposal piqued the interest of Altman, who subsequently met with the senator to discuss the proposal. Altman did not support the 50 percent tax threshold, but according to Financial Times, he has talked with Trump about giving the federal government a 5 percent stake in his company. Trump, in turn, has supported the idea of the government acquiring equity in AI companies, which he said would make the public “very rich” and make AI “very popular.”
By creating a sovereign wealth fund that shares AI’s profits with the people, companies could help them win the support of an increasingly AI-wary American public — which will be necessary if they want to grow their subscriber numbers, attract investment and access additional computing power. According to Gallup, 70 percent of Americans oppose the construction of AI data centers, which has led to a growing number of moratoriums on their construction.
The U.K. government, meanwhile, has launched an AI sovereign wealth fund of its own. But unlike Sanders’ proposal, its Sovereign AI Fund would function more like a venture capital fund to aid the growth of British AI companies. The $675 million fund would provide each startup with up to £10 million in capital, 1 million in GPU hours and access to the country’s research and datasets.
Of course, the U.S. already spends billions of dollars supporting AI research and infrastructure. By creating an AI sovereign wealth fund, the government would not merely subsidize the AI economy — it could own a piece of it. If those investments appreciated, the returns could theoretically provide a new source of public wealth at a time when AI could simultaneously generate enormous fortunes while disrupting millions of jobs.
Ultimately, the debate over an AI sovereign wealth fund is about more than investment strategy; it’s a question of ownership: If AI creates extraordinary new wealth, who gets to own it?
Frequently Asked Questions
What is the largest sovereign wealth fund?
The largest sovereign wealth fund is Norway’s Government Pension Fund Global, which has more than $2 trillion in assets under management.
Does the U.S. have a sovereign wealth fund?
No, the U.S. government does not have a sovereign wealth fund, but President Donald Trump has proposed the creation of one. Several states, most notably Alaska, have sovereign wealth funds. Established in 1976, the Alaska Permanent Fund has more than $90 billion in reserves and distributes annual cash payments to every Alaska resident.
How is a sovereign wealth fund different from a hedge fund?
A sovereign wealth fund is state-owned and invests on behalf of a country’s citizens over a long time horizon. A hedge fund is privately owned, raises capital from institutional investors and typically pursues shorter-term, higher-risk strategies to maximize returns.
Can citizens invest in a sovereign wealth fund?
No. Sovereign wealth funds are owned and managed by governments, not offered as investment vehicles to the public. However, some funds use their investment returns to benefit citizens through direct payments, or indirectly through public services, infrastructure and other government programs.
