AI boom: The .ai domain becomes a cash cow for Anguilla

The hype surrounding artificial intelligence has made many people rich. With the launch of ChatGPT in 2022, a completely new economic sector is booming. This is driving revenues for tech companies like OpenAI, Google, and chip manufacturer Nvidia, which have become the engines of economic growth in the US. But even industries and countries you wouldn't necessarily expect are benefiting from this boom. A particularly curious example is the British overseas territory of Anguilla in the Caribbean.

Many decades ago, when the internet was still in its infancy, the Internet Assigned Numbers Authority (IANA) defined domain abbreviations for all countries in the world, the so-called top-level domains. In the 1980s, for example, Germany received the identifier .de, France .fr, Japan .jp, and Australia .au. These are based on an ISO standard, i.e., an internationally applicable standard.

But even territories that aren't entirely independent received abbreviations. What the British overseas territory of Anguilla didn't know at the time: its identifier would be worth its weight in gold more than 30 years later. It's .ai.

Hundreds of AI companies have secured domains for their projects with the country code Anguilla in recent years. Few website visitors are likely to associate the .ai extension with Caribbean beaches, but they do associate it with "Artificial Intelligence." Google's AI offerings, for example, can be found under the domain google.ai, Elon Musk uses the address x.ai with his company—and the French startup Mistral, of course, uses Mistral.ai.

According to statistics from the website "Domainnamestat," domain registrations with the .ai extension have increased more than tenfold since 2020 – and nearly doubled again in the past twelve months alone. While monthly registrations were around 470,000 in November 2024, they rose to 914,000 in September.

Exactly who benefits from domain registration varies from country to country. In Germany, .de domains are assigned by Denic eG – a cooperative that established a legal framework for the registration process in the 1990s. The .nl domain for the Netherlands is assigned by SIDN (Stichting Internet Domainregistratie Nederland). And in some countries, the fees go directly to the government – ​​as is the case in Anguilla.

Data centers for artificial intelligence consume enormous amounts of energy. A case from Memphis, USA, now demonstrates the potential impact. A company owned by Elon Musk operates environmentally harmful gas turbines there. Residents say they can barely breathe.

It's worth it: The BBC recently reported that tech founder Dharmesh Shah paid $700,000 for the use of the highly sought-after domain you.ai. Apparently, it will be used for a product "that would allow people to create digital versions of themselves that could perform certain tasks on their behalf" – apparently, the massive investment in the domain was worthwhile. The cost of a .ai address is typically around €150 per year.

In its draft budget for 2025, the island nation's government states that it earned 105.5 million Eastern Caribbean dollars from the sale of such endings in 2024 alone. This equates to approximately €33 million and represents a good quarter of Anguilla's total annual revenue. By comparison, tourism, the island nation's most important economic factor, contributes 37 percent of government revenue.

According to the BBC, Anguilla's challenge now is to convert its newfound wealth into a long-term, sustainable source of income. Anguilla, which has a population of only 16,000, is heavily dependent on tourism, but this is highly vulnerable to hurricanes. The new source of income not only diversifies the local economy but also makes the island nation more financially independent from Great Britain, the British broadcaster reports. Anguilla has now signed a five-year contract with a tech company to manage the domains. All .ai domains have also been migrated to a global network as part of this move, making them less vulnerable to disruptions such as storm-related power outages.

The Caribbean island nation's case isn't the only one of its kind. The .io domain extension has been at least as popular in recent years. It's popular with tech companies because it's an abbreviation for "input/output"—a term commonly used among computer scientists. Projects and products that are meant to sound cool and technical therefore often have this domain extension—it's used by, among others, the programming platform Github.

At the same time, it's popular because of the two vowels that appear in many words and names. Marco Rubio, a Florida senator and candidate for the 2016 Republican presidential nomination, used the website rub.io at the time – it's now for sale for just under $14,000.

Just like .ai, however, this domain isn't one specifically created for the tech world. .io is simply the abbreviation for "Indian Ocean," referring to the British territory there.

This, however, has led to a complicated situation since October of last year: At that time, the British government announced that, after lengthy negotiations, it would cede sovereignty over the Chagos Archipelago to the island nation of Mauritius . The exception is the island of Diego Garcia, which houses a military base shared with the United States.

With the unification of Great Britain and Mauritius, the British Indian Ocean Territory no longer exists—and according to current IANA rules, this would also mean the disappearance of the .io domain. This isn't the first case of this kind: The .yu domain for Yugoslavia and .zr domains already disappeared when Zaire renamed itself the Democratic Republic of Congo.

Unless special regulations are made, all domains with the trendy ending would have to be transferred after a five-year grace period. Whether this will actually happen, however, is not yet entirely clear: An exception was made in the past for the .su domain. It once belonged to the Soviet Union and still exists—today it is administered by Russia.

The .tv domain extension has also been misused for years. It is used by numerous television stations – the most well-known example in German-speaking countries is probably the website of the music channel Viva, viva.tv. Twitch, the world's largest streaming platform owned by Amazon, also has the address twitch.tv as its official domain. However, the identifier actually belongs to Tuvalu, an island nation in the Pacific Ocean.

According to media reports, the domain extension contributes about one-twelfth of Tuvalu's gross national income , which is approximately $60 million. Ironically, many of the island's residents cannot even access websites like twitch.tv due to the rather poor internet connection—it relies on a low-bandwidth satellite connection.

The .fm extension is especially popular with radio stations, but actually belongs to Micronesia. In a technical context, the .me extension is also frequently seen. PayPal.me is used by the payment service provider for personalized payment links—although the domain extension actually belongs to Montenegro.

However, the hype surrounding trendy domains is often accompanied by dubious dealings. The Chagossians also view the use of their .io domain as a form of exploitation, as can be read in a request to the African Commission on Human and Peoples' Rights . They estimate the domain's annual value at $50 million and also complain about the numerous dubious crypto entrepreneurs currently using their domain name.

Behind the .tk domain, which actually belongs to the New Zealand colony of Tokelau in the South Pacific, a veritable economic crime has developed. In the 1990s, a Dutchman bought the rights to the domain and subsequently developed an unusual business model: The domain can be registered free of charge, but in return, the company places advertising on the respective websites.

The result: The domain is now a favorite with criminals—for example, websites that intercept passwords or payment information, distribute malware, and display annoying pop-up ads. To this day, the small island is trying to get out of the contract.