You can’t spell Anguilla without AI

You could argue that AI is more important to Anguilla than any other country right now. Almost half of their national income this year will come from AI (sort of, via .ai domain registrations).¹ I almost wrote that this makes Anguilla The AI Capital of the World, but for that to be true this story would have to be relevant outside of Anguilla. AI’s proportional impact may be more economically meaningful in Anguilla than anywhere else up until now, but why should the rest of the world care?

Anguilla is about 160 miles dead east of mainland Puerto Rico, splitting the gap between the British- and US Virgin Islands. It’s 16 miles long by 3 miles wide—35 square miles—or about the size of Maine. Around 15,000 people live there, so it’s smaller than the undergraduate student body at University of Virginia where I went to college. It’s a British overseas territory. Cars drive on the left, and there’s no public transport. Its economy has mostly been tourism and offshore banking. Outside of fish, Anguilla has few natural economic resources. But it has one important unnatural resource: its .ai top-level domain.

Anguilla is the A-island (or AI Land). This matters outside of Anguilla because (1) it’s a case study of the economic value of a TLD, and (2) over half a million registrants trusted a tiny hurricane-prone island to keep the lights on for their domain, probably without knowing it.

A hurricane in Anguilla took down my website

In 2017, Hurricane Irma caused $320 million in damage to Anguilla. That’s ten times the $32 million Anguilla earned selling domains in 2023. Irma and other hurricanes did not actually crash any Anguillian servers, but it was a real risk cited by the new .ai operator.

In January of this year, the major domain registry Identity Digital took over operation of 598,007 .ai domains and counting. Before January, those domains relied on a connection “to the government’s digital infrastructure through a single internet cable to the island.” How many of those half million registrants considered hurricane risk, or even knew their .ai domain relied on an island in the Caribbean?

Before Identity Digital took over, .ai domains were managed by an expat cryptographer named Vince Cate who basically inherited that role because he wanted a .ai website.

I came to Anguilla in 1994. I wanted to have a domain name that was .ai. So I reached out to Jon Postel—he was the one that was in charge of all these top-level domains. He said, there’s nobody running .ai, do you want to run .ai? And I said, “Okay.” That was really how it went! (IEEE Spectrum)

As casual as that sounds, it was not obvious then how important domains would become to Anguilla and the nearly one million domain owners that depend on .ai now. To his credit, Vince seems to have been a good steward of the domain. Many countries have mismanaged their TLD in one way or another. Tokelau, an island one tenth the size of Anguilla, sold its .tk domain to a Dutch guy who I guess did a much worse job than Vince, letting .tk become massively abused for cybercrime. Tuvalu, another tiny island with a killer TLD, earns serious money from .tv, but it left a lot on the table. Here’s Vince:

Tuvalu gave [domain registrations] to a big foreign company, and locked themselves in for 50 years. And we’re doing it locally. So the government is getting almost all the money. And that’s not what was happening in Tuvalu, right? Most of the money was not going to the country.

But Anguilla almost fumbled .ai, too. Vince again:

At some point, I said, this shouldn’t be in my name, right? So I changed the admin contact to be the government of Anguilla. Somebody else saw that and convinced the government to give it to them, so it went to this company in Taiwan. After a couple of years, they disappeared. They didn’t answer emails or phone calls or anything. And we got it back. A number of small countries got really messed up by losing their domain names, and I would say we kind of came close.

Identity Digital reportedly gets a 10% cut of domain registrations and renewals, per BBC. Domain revenue hit US$39 million in 2024 and sounds like it’ll almost double in 2025. In an interview on BBC radio, Anguillian government official Jose Vanterpool said those funds are being used to pay down debt; invest in infrastructure like a new airport terminal, roads, and renewable energy; fund schools and training; and “save for a rainy day” (which I think he meant both figuratively and literally, as in hurricanes). He also talked about protecting wealth for future generations through a development fund. Hypothetically, Anguilla could even fund a Universal Basic Income of $2-5k per citizen (kind of like Alaska’s oil-funded dividend).

The economics of top-level domains

I like to think of Anguilla’s domain business as a company instead of a country. There are plenty of companies with more employees than Anguilla’s 15,000 citizens, more property than Anguilla’s 35 square miles, and much more money than Anguilla’s $39m in domain revenue. I don’t know how many people were helping Vince Cate, or if it really was just him running .ai for thirty years—either way, it’s a good business built around one valuable asset.

But is it replicable?

Country-code top-level domains (ccTLDs) like .ai are assigned based on an international standard (ISO 3166), but generics (gTLDs) like .xyz are invented and allocated or auctioned to registries. It costs $227,000 to even apply for a gTLD, and auctions can climb into the millions (like $41 million for .shop in 2016). Dedicated registries like Identity Digital and XYZ have raised millions to bet on generics, as have bigger players like Google and Amazon.

There are over a thousand gTLDs already, and we’re going to see another flood from the upcoming 2026 gTLD round (the first since 2012). I am curious to see what new names are invented, how much money gets invested, and how many new registries enter the market in the new round. How big will my TLD wiki/exploration tool grow over time?

It’s one of the topics I’m most eager to learn about later this month when I go to Dublin for ICANN84. Reply if you have questions you’d like me to pursue while I’m there. Thanks for reading.

Footnotes

(1) Anguilla’s Minister of IT (among other things) Jose Vanterpool went on a BBC radio interview last month and said that .ai registrations will make up ~47% of Anguilla’s income this year.