WASHINGTON, DC – Artificial Intelligence (AI) technologies like ChatGPT hold great promise to spur productivity growth and innovation globally. They have also generated an unusual boom in Anguilla, a British overseas territory and member of the Eastern Caribbean Currency Union (ECCU), whose .ai country-code internet domain has become a favorite among technology companies across the world.
Since the launch of ChatGPT in November 2022, registrations of .ai domain names have skyrocketed—surging from 144,000 registrations in 2022 to 354,000 in 2023.
In 2023 alone, this surge in .ai domain registrations generated EC$87 million (One EC dollar=US$0.37 cents) in revenue, just over 20 per cent of the government’s total revenue for the year.
This marks a dramatic increase from previous years, when revenue from .ai domain registrations hovered around five per cent.
Looking ahead, the Anguilla government expects revenue from .ai domain registrations to stabilize at around 15 per cent of total government revenue, as the initial rush of registrations gradually slows.
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 (SIDS), as others like Tuvalu (.tv) have benefited from favourable country code top-level domains assigned in the 1990s by the International Telecommunication Union (ITU).
Although capitalizing 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 prioritizing 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.
Flavien Moreau is an economist in the IMF’s Western Hemisphere department.
