In the sun-drenched Caribbean, where turquoise waters meet pristine beaches, the tiny British overseas territory of Anguilla has quietly transformed into an unlikely powerhouse in the artificial intelligence economy. This shift stems not from silicon chips or data centers, but from a fortuitous two-letter code: .ai, the country’s top-level internet domain. Assigned randomly in the 1990s by the Internet Corporation for Assigned Names and Numbers, .ai has become a coveted asset amid the global AI frenzy, generating millions in revenue for the island’s 15,000 residents.

Recent headlines spotlight this phenomenon through high-profile transactions. Tech entrepreneur Dharmesh Shah, co-founder of marketing software giant HubSpot, recently shelled out $700,000 to secure a premium .ai domain. As detailed in a report from Business Insider, Shah’s payment underscores the escalating value of these digital addresses, with Anguilla reaping substantial fees from registrations and sales. This isn’t an isolated case; domains like you.ai fetched $700,000 and cloud.ai went for $600,000, according to posts on X highlighting premium deals.

The Economic Windfall from Digital Domains

Anguilla’s domain bonanza has dramatically altered its fiscal profile. In 2024, the government earned approximately $39 million from .ai registrations, representing nearly a quarter of its total revenue, as noted in a Rio Times article. This surge rivals tourism, the island’s traditional economic pillar, which accounts for about 37% of GDP per International Monetary Fund estimates. The IMF’s own analysis, published in May 2024, describes this as an “AI-powered boost,” projecting continued growth with revenues climbing to 132 million Eastern Caribbean dollars in 2025 and 138 million in 2026.

The numbers are staggering for such a small territory. From fewer than 50,000 .ai domains in 2020, the count has exploded to over 850,000 by 2025, fueled by AI startups and tech firms eager for branding that screams innovation. A New York Times feature from March 2024 captured the early momentum, reporting $32 million in 2023—over 10% of GDP—while a recent BBC News piece updated that Anguilla is “earning a fortune” from tech firms snapping up these addresses.

Behind the Scenes: Governance and Global Ties

Managing this windfall falls to Vince Cate, an American expat who has overseen Anguilla’s domain registry since 1995. Cate’s role involves auctioning premium domains and handling renewals, with standard two-year registrations costing around $240, plus a 20% cut for resellers. As explored in depth by Meristation in July 2025, this setup has turned .ai into a “digital goldmine,” with revenues exceeding $100 million annually. Yet, challenges loom, including potential domain squatting and the need for sustainable investment.

Anguilla’s government, under British sovereignty but with significant self-governance, is channeling funds into infrastructure, education, and disaster resilience—crucial after hurricanes like Irma in 2017. Insights from X posts, such as those from users noting per-resident earnings equivalent to $6,200 yearly, reflect public sentiment on this boon. A Medium article by Sheev Charan in June 2025 mused on the irony: a nation of 15,000 profiting passively from AI without building a single algorithm.

Future Prospects and Industry Implications

As AI adoption accelerates, demand for .ai domains shows no signs of abating. Projections from Firstpost suggest a 15% revenue increase in 2024 alone, with tech giants and startups alike vying for prime real estate. However, experts warn of market saturation; not every .ai will command premium prices, and competition from alternatives like .io persists.

For industry insiders, Anguilla’s story offers lessons in opportunistic economics. It highlights how legacy internet infrastructure can yield modern fortunes, prompting other nations to reassess their domain assets. As one X post quipped, it’s “God smiling down” on the island—a sentiment echoed in a NewsBytes report. Yet, sustaining this requires prudent management, ensuring the AI boom benefits Anguillans long-term without overreliance on fleeting tech trends.