Prof C. Justin Robin­son, Flavien More­au

In the sleepy cap­i­tal of this amaz­ing­ly beau­ti­ful Caribbean is­land, where the pace of life moves to the rhythm of trade winds, gov­ern­ment of­fi­cials are grap­pling with an ex­tra­or­di­nary prob­lem: what to do with tens of mil­lions of dol­lars in un­ex­pect­ed rev­enue. The wind­fall didn’t come from dis­cov­er­ing oil or strik­ing gold. In­stead, An­guil­la hit the dig­i­tal jack­pot through two sim­ple let­ters: A and I.

In 1995, the .ai do­main was as­signed to An­guil­la as part of rou­tine in­ter­net in­fra­struc­ture de­vel­op­ment, one of hun­dreds of coun­try codes dis­trib­uted world­wide. For near­ly three decades, it gen­er­at­ed mod­est in­come that rarely ex­ceed­ed 5 per cent of gov­ern­ment rev­enue. Then came the AI rev­o­lu­tion. When ar­ti­fi­cial in­tel­li­gence ex­plod­ed in­to main­stream con­scious­ness with Chat­G­PT’s de­but in late 2022, com­pa­nies world­wide scram­bled to se­cure web ad­dress­es end­ing in .ai — the in­ter­net do­main that hap­pens to be­long to this British ter­ri­to­ry of just 15,000 peo­ple. Overnight, An­guil­la found it­self con­trol­ling one of the most cov­et­ed pieces of dig­i­tal re­al es­tate on the plan­et.

An­guil­la went from earn­ing a few mil­lion dol­lars a year to over ap­prox­i­mate­ly US$39 mil­lion (EC$105 mil­lion) in 2024 alone. The Gov­ern­ment of An­guil­la projects that .ai do­main rev­enues will reach EC$132 mil­lion in 2025, EC$138.6 mil­lion in 2026, and EC$145.53 mil­lion in 2027. The num­bers tell a re­mark­able sto­ry of how ge­og­ra­phy and tim­ing can con­verge in the dig­i­tal age. Do­main reg­is­tra­tions surged from 144,000 in 2022 to 354,000 in 2023, now reach­ing over 600,000 in 2025, with tech gi­ants like Google us­ing google.ai and Elon Musk’s xAI claim­ing x.ai as prime dig­i­tal ad­dress­es. Even in­di­vid­ual do­mains have com­mand­ed stun­ning prices — Hub­Spot co-founder Dharmesh Shah paid US$700,000 for the cov­et­ed you.ai.

From tourism to tech hub

Un­like oth­er small na­tions that sold their valu­able do­mains to for­eign com­pa­nies, An­guil­la re­tained con­trol while part­ner­ing with US-based Iden­ti­ty Dig­i­tal to man­age the tech­ni­cal in­fra­struc­ture. The five-year deal, fi­nalised in 2024, en­sures An­guil­la keeps the ma­jor­i­ty of rev­enues while ben­e­fit­ting from pro­fes­sion­al man­age­ment and glob­al dis­tri­b­u­tion net­works. An­guil­la seems to have learned from oth­er coun­tries’ mis­takes. An­guil­la has shown how to turn a coun­try code in­to a sig­nif­i­cant eco­nom­ic as­set.

An­guil­la’s suc­cess has at­tract­ed at­ten­tion from oth­er Caribbean na­tions seek­ing sim­i­lar op­por­tu­ni­ties. The ter­ri­to­ry’s ap­proach demon­strates how small is­land de­vel­op­ing states can lever­age un­ex­pect­ed ad­van­tages through strate­gic plan­ning and care­ful as­set man­age­ment.

Oth­er coun­tries with in­ter­est­ing do­mains are watch­ing An­guil­la close­ly. St. Vin­cent and the Grenadines con­trols the .vc do­main pop­u­lar with ven­ture cap­i­tal firms, while oth­er ter­ri­to­ries are re­con­sid­er­ing the po­ten­tial val­ue of their dig­i­tal as­sets.

The .ai phe­nom­e­non has shown that eco­nom­ic trans­for­ma­tion can come from un­ex­pect­ed sources, re­quir­ing on­ly the vi­sion to rec­og­nize op­por­tu­ni­ties and the wis­dom to man­age them well. For An­guil­la, two sim­ple let­ters have opened a door to pos­si­bil­i­ties that ex­tend far be­yond the shores of this small is­land par­adise.

Giv­en that An­guil­la is heav­i­ly de­pen­dent on tourism, with tourism ac­tiv­i­ties ac­count­ing for 37 per cent of GDP, the .ai do­main reg­is­tra­tion boom is al­so play­ing an im­por­tant role in di­ver­si­fy­ing the econ­o­my, thus mak­ing it more re­silient to ex­ter­nal shocks.

An­guil­la’s sto­ry is not unique among Small Is­land De­vel­op­ing States, as oth­ers like Tu­valu (.tv) have ben­e­fit­ted from favourable coun­try code top-lev­el do­mains as­signed in the 1990s by the In­ter­na­tion­al Telecom­mu­ni­ca­tion Union.

Al­though cap­i­tal­is­ing on this “vir­tu­al en­dow­ment” has pre­sent­ed chal­lenges for oth­ers, An­guil­la has been suc­cess­ful with its pric­ing mod­el, charg­ing US$140 for a two-year do­main reg­is­tra­tion. This mod­el not on­ly en­cour­ages new reg­is­tra­tions but al­so guar­an­tees a steady stream of in­come from re­newals, giv­en that about 90 per cent of do­mains are re­newed af­ter two years. Ex­pired .ai do­mains have proven to be high­ly valu­able too; for ex­am­ple, the do­main “lit­i­gate.ai” was auc­tioned for US$13,000 in 2023.

In re­sponse to this fi­nan­cial wind­fall, An­guil­la’s au­thor­i­ties have com­mit­ted to a pru­dent fis­cal strat­e­gy, pay­ing down debt and pri­ori­tis­ing cap­i­tal ex­pen­di­ture. The in­jec­tion of funds from .ai do­main reg­is­tra­tions can ben­e­fit key in­fra­struc­ture projects such as the de­vel­op­ment of the air­port. The gov­ern­ment al­so plans to in­vest these rev­enues in long-term, sus­tain­able projects in ar­eas like re­new­able en­er­gy. As with many Caribbean neigh­bors, the Blue Econ­o­my—in­clud­ing sus­tain­able fish­ery and bio­di­ver­si­ty preser­va­tion—re­mains the gov­ern­ment’s medi­um-term fo­cus.

Justin Robin­son is pro­fes­sor of fi­nance and prin­ci­pal of UWI Five Is­lands Cam­pus

Flavien More­au is an econ­o­mist in the In­ter­na­tion­al Mon­e­tary Fund’s West­ern Hemi­sphere de­part­ment