AI startups have an unexpected business partner: the tiny Caribbean island polity of Anguilla. In 1980, Anguilla, a territory of the United Kingdom, was awarded the .ai domain name by the Internet Assigned Numbers Authority (IANA). This fairly arbitrary assignment––while innocuous at the time—has proved a boon amidst the AI boom.
While established technology companies have opted not to register websites with .ai—Google DeepMind, ChatGPT, and Meta all prefer ai.com—many AI startups have sought .ai websites to boost their public stature. Elon Musk’s startup xAI notably falls in this basket. Since 2022, an influx of domain registrations has significantly boosted Anguilla’s economy, with experts estimating that the nation is earning approximately $3 million per month from licensing .ai domains. Vince Cate, an Anguillan who has helped to administer the island’s newfound fortune, predicts that such domains will bring in $75 million—about 10 percent of its GDP—by 2025.
With only 35 square miles of territory and a historical reliance on tourism and fishing, Anguilla has typically had little cash to spend. The effects of this sudden influx of wealth have therefore been significant: Anguilla has used the funds to provide free healthcare for senior citizens, expand the island’s sole public high school, improve its airport, and double its budget for sports and other events. The timing of the boom is equally fortunate, as it follows a period of devastation caused by Hurricanes Ernesto and Irma.
Anguilla’s situation is not without precedent. Twenty-eight years ago, Tuvalu licensed its domain name, .tv. Tuvalu used the funds from .tv registrations to finance joining the United Nations, bring electricity to parts of the island chain, and create scholarships. However, while Tuvalu outsourced the management of its domain name to outside companies, Anguilla has taken the matter into its own hands and enforced direct control.
A cautionary tale lies in the story of Niue, an island nation in the South Pacific that missed out on a possible fortune. In the 1990s, Niue sold the rights to its .nu domain to an American businessman in exchange for internet connectivity on the island. “.nu” translates to “.new” in many Germanic languages, including Dutch, Swedish, and Danish, and as .nu websites gained popularity in Europe, Niue lost out on millions in potential revenue.
Bill Semich, the businessman who bought the rights to .nu, has since made a fortune. Niue, meanwhile, sought income through unconventional methods such as selling stamps and coins to collectors and renting out its international dialing code—a choice that eventually led to complaints from citizens who received unwanted sex calls from Japan in the middle of the night. Though Niue attempted to seek $30 million in damages from the Swedish Internet Foundation, the organization that eventually took possession of .nu, it ultimately lost the case. Experts within Niue estimate that if the domain had reverted to the island’s ownership, it would have added about $2 million to annual revenue. As such, Anguilla should be wary of selling its rights to .ai, even amidst a possible future devaluation of AI startups as investors acquaint themselves with the potential limits ofAI’s capabilities.
Anguilla’s newfound goldmine is a technology-enabled product of the modern age. Tiny island polities and American technology companies are being bound together by shared concern over a novel type of strategic resource. This link, however, is tenuous—domain names have little connection to the geography of these island states and rest purely on the IANA and its arbitrary naming conventions. The islands cannot control whether a particular domain name will suddenly become popular overseas, and the companies cannot control nations’ randomly assigned internet suffixes. Globalization and digitization have ensured that developments in one nation seldom stay in local waters. Fate has intertwined Anguilla with an AI boom happening an ocean away—but whether it overentangles itself in the promise of short-term revenue remains to be seen.