.AI domain names are the next big thing on the internet. That’s great news for Anguilla

The tropical British territory of Anguilla wasn’t known to many outside those who sought out its sun-kissed beaches. That was until the generative AI revolution. Suddenly, the island of around 16,000 people became a key broker in the future of our digital lives.

In the 1990s, it was given the domain name ending .AI. Back then, gTLDs (or generic top-level domain names) didn’t go much beyond .com, .org, or .net. The only real envisaged market for .AI domain name endings was local businesses on the island. Until ChatGPT changed everything, and the market for .AI domain names exploded.

Today, more than half a million .AI domain names are registered with Anguillan authorities, who have until now used a local firm called DataHaven.net. The domain names registered include x.ai and claude.ai but notably not open.ai, which is currently held up in a long-running dispute between an individual who claims to have invented the name and concept of OpenAI before Sam Altman unveiled it in 2015—and has a surprising amount of documentary evidence to support his case.

The artificial intelligence boom has seen a near 400% increase in registrations in the past five years. That interest has brought fortune to Anguilla. Sales of domain names made the country $32 million in 2023 alone, which is one-fifth of the country’s total government revenue. In 2017, the year that an academic paper called “Attention Is All You Need” formalized the idea of the transformer, which gives ChatGPT the T in its name, Anguilla made $1 million from domain name sales.

But success has come at a cost. The infrastructure and companies behind domain name registrations in the country weren’t set up for the scale of interest AI has brought it. DataHaven was effectively just one man: Vince Cate. So it’s changing tack.

The country put the rights to manage its domain name ending up to tender. The winner, with a closed bid they’re unwilling to reveal the value of, was Identity Digital.

Identity Digital—formerly known as Donuts—oversees 28 million domains through its registry services platform. It works with domain name registrars, or companies that handle the registration of domain names. The company owns nearly 300 TLDs, or top-level domain names, including .info, .pro, and .live.

“It was a revenue share,” says Ram Mohan, chief strategy officer of Identity Digital. Mohan did disclose that the “vast majority” of the revenue will go to the government of Anguilla. As part of the bid, Identity Digital also promised a minimum guarantee to Anguilla when it comes to revenue.

“We’ve said, no matter what happens, we will guarantee that you’re going to get a certain amount of money,” Mohan says. (He declined to share the specific number.) “That is, I think, a testament to the level of confidence that we have that this is going to be a winner for companies, is going to be a winner for the country, and is going to be a winner for our company.”

The Anguillan executive seems to agree. “Together, we will be responsible stewards of .AI, guaranteeing its stability, security, and global prominence,” said Ellis Webster, the premier of Anguilla, in a statement.

Beyond the money—Mohan believes Anguilla will book double its 2023 revenue of $32 million from domain name sales by the time this year is out, and described his company’s job as “to preserve exponential growth if that is where the market is going”—there’s an element of security that Identity Digital says it can provide to the .AI gTLD that it believes couldn’t be ensured by a smaller provider.

Anguilla is already seeing cyberattacks waged against its domain name provider, which had spooked companies who are increasingly turning to it to host their websites and services. (Everything from Claude to Character.ai is accessible through an Anguillan domain name.) “When AI moves from something that you showcase to something that is actually critical infrastructure for companies,” Mohan says, “one of the questions that they kept getting asked was, ‘Is this going to scale? Is this going to work? Will it be made faster?’”

It’s not just security against attacks coming in that Identity Digital believes it can provide to the .AI domain name ending. It’s also security to stop attacks going out. Phishing attacks account for around two-thirds of all the content on .AI domain names, according to one analysis—something Anguilla, and Identity Digital, are keen to crack down on. “One of the first things that we’re going to be doing is helping ensure that the security of the name is actually secured in a good way,” Mohan says. “If there is cybersquatting, if there are people who are using the .AI name to phish and things like that, those will get mitigated very rapidly.”

The ability to depend on links outside Anguilla for key services will also make a difference, says Mohan, who points to the fact that the entire island lost power for three months in the aftermath of Hurricane Irma in 2017. In a world where .AI domain name endings are integral to digital society, such downtime wouldn’t be acceptable.

The two parties have agreed to a five-year contract to oversee the domain name ending. “Our thinking is that this top-level domain has a huge runway ahead of it,” Mohan says. “It has a long way to go.”