Nearshore Americas

Anguilla: The Tiny Caribbean Island Banking Big on the AI Explosion

An unforseen yet happy coincidence has put Anguilla, a small island in the Caribbean, in a position that is allowing it to benefit in unique ways from the recent AI explosion.

By solely managing the issuance of web domain names ending with “.ai,” Anguilla has generated over US$28 million in revenue in 2023, representing nearly 15% of its GDP.

Anguilla’s official country code is “AI,” which authorized it to administer “.ai” domain names, in accordance to rules established by the Internet Assigned Numbers Authority (IANA) in the late 90s.

Demand for “.ai” domains remained modest, with Anguilla registering only a few thousand every year. However, the landscape drastically shifted with the emergence of ChatGPT in late 2022. Demand surged, and Anguilla now registers at least 20,000 new “.ai” domains every month, according to a press release from DomainWheel.

The value of these domains skyrocketed too. In October 2023 alone, the domain “you.ai” was purchased for a US$700,000, according to marketplace Sedo.

“We typically register around 700 names daily,” stated Vincent Cate, the official responsible for managing domain names on the island.

Official records show “.ai” domain registrations reaching a total of 353,928. Over 100,000 of these registrations occurred in the latter half of 2023 alone, a growth of 84.73% for the last six months of 2023.

So much money

Anguilla’s domain name registration fees, at US$140 per domain, generate a monthly revenue stream of approximately US$3 million.

This figure holds substantial weight for a small nation like Anguilla, with a population of under 16,000. In 2023, the revenue generated by domain registrations translated to an average of US$1,784 per citizen, excluding government administration costs.

The windfall from domain registrations has empowered the Anguillian government to implement various tax breaks and social programs. This includes the elimination of residential property taxes and plans to improve tourism infrastructure, alongside enhancements to healthcare and educational accessibility at affordable costs for all residents.

“The best time to plant a tree was twenty years ago. The second-best time is now,” said the country’s Prime Minister, Ellis Webster, in a recent budget speech.

“While we have witnessed a significant increase in our revenue streams from these registrations, it is imperative that we approach this windfall with prudence and foresight,” Webster added. “Our goal is not just to enjoy the immediate benefits but to secure a stable and prosperous future for every Anguillian.”

Anguilla anticipates robust economic growth of 6.9% in 2024. Domain name registrations alone are projected to generate revenue exceeding US$45 million. Reports suggest this income could potentially double in the coming years due to the mandatory two-year renewal cycle for domain names.

Will the well dry up?

The surge in acquisitions of AI-related domain names may not continue unabated throughout the coming decade. This in part to the diminishing influence of domain names on search engine rankings.

Search engines now prioritize keyword-based searches over exact-match domain names. This means that users are increasingly likely to find relevant websites through specific keywords rather than directly remembering or typing in full web addresses.

Therefore, companies are likely to prioritize cost-effectiveness and brand alignment when choosing domain names in the future.

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Google executives have given creedence to the idea of search engines undermining domain names. In 2020, John Mueller, Google Webmaster Trends Analyst, explicitly stated that keywords within domain names no longer hold any weight in search result rankings.

“In short, no. You don’t get a special bonus like that from having a keyword in your top-level domain,” Mueller stated.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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