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Wall Street Journal

A Sovereign-Wealth Fund to Keep America's Technological Edge

If the U.S. wants to win the global race for technological supremacy, the country's best tool is a sovereign-wealth fund. Washington's haphazard approach to fueling national competitiveness and strategic industries isn't cutting it in today's environment. But intelligently deploying President Trump's proposed sovereign-wealth fund could secure American leadership in such critical technologies as quantum computing, artificial intelligence and advanced microchips. China is already shaping its technological future through strategic investment. The U.S. can't afford to cede leadership in technologies that will define the coming century. Other countries have used sovereign-wealth funds to great national advantage. Norway's Government Pension Fund Global is the premier example. It sets the standard for performance and transparency, delivering consistent returns while adhering to strict ethical guidelines. The Government of Singapore Investment Corp. generates outsize influence for the small nation. Oil-rich states leverage their wealth strategically with funds such as Abu Dhabi's Mubadala investment fund, which aims to position the United Arab Emirates as a global AI hub. Critics rightly point out that an American sovereign-wealth fund must be free of political interference and focused on commercial national research and defense priorities. But other nations' examples prove this is possible. There are also concerns about forming a fund when the U.S. is running budget deficits. The benefits far outweigh the risk. America needs this fund now more than ever. Both geopolitics and innovation shape the economy. It isn't enough to hope we maintain tech leadership through our financial dominance, banking leadership, private venture capital and intermittent government interventions. American firms have to grapple with difficult market distortions thanks to Chinese state investment, which places U.S. tech companies at a disadvantage. Beijing has formed various state-backed venture funds to invest in AI, quantum research and semiconductor manufacturing. These investments foster domestic innovation and advance strategic sectors. China's National Venture Capital Guidance Fund channels tens of billions of dollars of central, provincial and private capital into key technologies, aligning investments explicitly with industrial strategy.