In the 1980s, when the internet was still in its infancy, each country received its own unique web addresses to navigate this nascent digital world, for example .us for the US or .uk for the UK.

Eventually, almost every country and territory had a domain based on its name in English or your own language. This included the small Caribbean island of Anguilla, which adopted the .ai address.

Unbeknownst to Anguilla at the time, this would become a future jackpot.

With the continued rise of artificial intelligence (AI in Spanish but AI in English), more and more companies and individuals are paying Anguilla, a British Overseas Territory, to register new websites with the .ai label.

People like US technology chief Dharmesh Shah, who earlier this year spent some $700,000 on the you.ai address.

Speaking to the BBC, Shah says he bought it because he had “an idea for an AI product that would allow people to create digital versions of themselves that could perform specific tasks on their behalf.”

The number of .ai websites has increased more than tenfold in the last five years and has doubled in the last 12 months alone, according to one website which tracks domain name registrations.

The challenge for Anguilla, which has a population of just 16,000, is how to harness this lucrative slice of luck and turn it into a sustainable, long-term source of income.

Hurricane-Proof

Like other small Caribbean islands, Anguilla's economy is based on tourism.

It has recently attracted visitors from the luxury travel market, particularly from the United States.

Anguilla's Statistics Department says there were a record number of visitors to the island last year, with 111,639 people coming to its shores.

However,Anguilla’s tourism sector is vulnerable to hurricane damage every fall.

Located northeast of the Caribbean island arc, Anguilla lies just inside the North Atlantic hurricane belt.

Therefore, earning increased revenue from selling website addresses plays an important role in diversifying the island’s economy and making it more resilient to financial damage that storms can cause.

This is something the International Monetary Fund (IMF) noted in a recent report on Anguilla.

In its draft 2025 budget, the Anguillan government states that in 2024 it earned $105.5 million Eastern Caribbean dollars ($39 million US dollars) from the sale of domain names.

This represented almost a quarter (23%) of its total revenue last year. Tourism accounts for approximately 37%, according to the IMF.

The Anguillan government expects its .ai domain revenue to grow further, reaching $132 million Eastern Caribbean dollars this year and $138 million in 2026.

This comes as there are already more than 850,000 .ai domains, up from fewer than 50,000 in 2020.

ai for growth

As a British Overseas Territory, Anguilla is under the sovereignty of the United Kingdom, but with a high level of autonomy.

The United Kingdom has significant influence on the island's defense and security and has provided financial assistance in times of crisis.

Following severe damage from Hurricane Irma in 2017, the London government granted Anguilla more than $80 million over five years to help cover the repair costs.

To manage its growing domain name revenue, Anguilla signed a five-year agreement in October 2024 with a US-based technology company called Identity Digital, which specializes in internet domain name registrations.

Earlier this year, Identity Digital announced it was moving hosting of all of its .ai domains from servers in Anguilla to its own global server network.

This is to prevent disruption from future hurricanes or other risks to the island’s infrastructure, such as power outages.

The exact cost of .ai addresses has not been publicly disclosed,but registration prices are said to range from $150 to $200, with renewal fees of roughly the same amount every two years.

At the same time, more sought-after domain names are auctioned off, some fetching hundreds of thousands of dollars. Their owners must pay the same renewal fees as everyone else.

In all cases, the Anguillan government collects the sales revenue, with Identity Digital taking an estimated 10% commission.

However, they appear to be sensitive to the issue, as both declined to be interviewed for this article.

Domain Auctions

So far, the most expensive .ai domain name has been Mr. Shah's you.ai.

Shah, a self-confessed AI enthusiast and co-founder of US software company Hubspot, has other .ai domain addresses in his name, but the flagship you.ai domain is not yet operational because he has been busy with other projects.

He says he buys domain names for himself, but occasionally looks to sell them “if I don't have immediate plans for them and there's another entrepreneur who wants to do something with the name.”

Shah believes another person or company will soon will set a new record for the highest purchase price for a .ai domain, such is the continued excitement around AI.

But he adds: “That said, I still think that in the long run .com domains will hold their value better and for longer.”

In recent weeks, .ai auctions have seen significant six-figure sales.

In July, cloud.ai sold for $600,000, and law.ai for $350,000 in early August.

What is happening in Anguilla is not unprecedented.

Tuvalu, a similarly small Pacific island nation, signed an exclusivity agreement in 1998 to license its .tv domain name.

Reports say this gave exclusive rights to US domain name registry company VeriSign in return for $2 million a year, which then increased to $5 million.

A decade later, and with the internet expanding exponentially, Tuvalu’s Finance Minister, Lotoala Metia, claimed that VeriSign paid a pittance for the right to manage the domain name.

The country signed a new agreement with another domain provider, GoDaddy, in 2021.

Anguilla is operating differently, having handed over management of the domain name on a revenue-sharing model, rather than a fixed payment.

Tapping into this new revenue stream sustainably has been a key goal for the island.

The increased revenue is expected to allow for the construction of a new airport to boost tourism growth, as well as fund improvements to public infrastructure and access to healthcare.

As the number of registered .ai domains approaches one million, Anguillans hope that money will be managed safely and invested in their future.