Why is the Caribbean making money from AI companies?

In 1974, the International Organization for Standardization, the most important global institute for defining technical standards and norms, assigned to every country in the world a code based on the abbreviation of their name, which in the following decades was integrated into the names of Internet domains. Just like Italy's is .it, that of a Caribbean archipelago - called Anguilla - is .ai, which in recent years has made it much more coveted than others. In English, it represents the abbreviation for "artificial intelligence": many companies operating in this sector, to have a web address that immediately communicates what they do, have started to register their sites on the .ai domain - paying to obtain it. This coincidence has brought fortune to the archipelago of Anguilla, which has just over 15,000 inhabitants, and its economy until recently depended almost exclusively on tourism and fishing. The registration of .ai domains currently represents about a third of the local government's revenue, bringing in about 3 million euros per month to the country.

Small countries, big domains

Often, highly demanded domains refer to small and almost unknown countries: this is the case of .fm, used by many radio websites or music services, which belongs to the archipelago of Micronesia, in the western Pacific. The same goes for Montenegro, a tiny country in the Balkans, which by selling domains linked to its .me has generated considerable income. And furthermore: Twitch's domain ends with .tv, belonging to the island of Tuvalu in the southern Pacific. The Chagos Islands, in the Indian Ocean, instead have .io as their associated domain, highly exploited among companies and tech startups as an abbreviation for a term particularly used in the sector, "input/output". In this latter case, however, it is not clear who gets the profits generated: the local government claims to receive nothing. The same goes for the island state of Niue, in the southern Pacific, which has never received money from the sales of .nu, causing a potential loss of income between 27 and 37 million dollars. Indeed, while most countries have now taken control of their domain, for others it is not yet the case.

The history of internet domains

In the past, domains were not directly managed by governments, but by individual administrators who took charge of it: sometimes they were academics or computer scientists, while others were simply the first people to propose. The entity that had control over the .nu domain in the nineties, associated with the state of Niue, sold the license to a Swedish company, which still refuses to transfer it to the government of the Pacific island. In the case of Anguilla, however, the management of the archipelago's domain was initially entrusted to a Californian guy, who had moved there to start an email business, and who still acts as an intermediary between the local government and the artificial intelligence companies interested in buying the .ai domain. Due to low demand, until 1995 obtaining a domain was free, but with the so-called dot-com bubble, domains became products to make money on. An increasing number of people began to realize how important the name of addresses was: many, in fact, started investing in "cybersquatting", which is the practice of purchasing a potentially coveted domain (perhaps associated with large brands not yet on the web), with the goal of reselling it at higher prices. This is how the domain buying and selling market was born, which still today represents a fundamental piece of the economy revolving around the Internet.