Anguilla funds the state with internet names

The 16,000 inhabitants of Anguilla have no oil income. But they have something that is almost as good.

When Elon Musk started the company xAI, which deals with artificial intelligence, he paid an unknown sum for the web domain “x.ai”. It is worth its weight in gold for the small nation of Anguilla.

The story begins in 1994. Then the internet was in its infancy. That year, American Vincent Gate decided to “vote with his feet”. He was tired of the USA, therefore he emigrated to tiny Anguilla in the Caribbean. There he started an online business. As Norwegian websites have “.no” as a distinguishing feature, he found that Anguilla has “.ai”.

But it wasn’t that simple. He was told that no one was managing the domain. If he wanted to take the job, he would be happy to do so.

Like oil in the North Sea

Gate didn’t know it then, but what he started in the internet’s infancy has become a gold mine for his new homeland.

“Ai” is the abbreviation for artificial intelligence. Musk is not alone in wanting such a web address.

Last year, every tenth dollar in Anguilla’s state budget came from the sale of domain names. That was just the beginning, according to the newspaper NRC. In March this year, the income came up between 3 and 4 million dollars, a third of the state’s income.

To compare: This year, approximately every fifth kroner the Norwegian government spends is “oil money”.

Gate arranges it so that the most exciting names are auctioned off or rented out on a yearly basis.

Last year, for example, someone paid 700,000 dollars for you.ai, while stack.ai went for 250,000 dollars.

Less exciting names are leased for two years. Then the price is 140 dollars.

– Some call it luck. We say it so that God smiles on us, Prime Minister Ellis Webster recently told The New York Times.

Still a tax haven

In interviews, Gate has explained why he settled on Anguilla. The 60-year-old Internet pioneer was fed up with American legislation and he doesn’t like paying taxes.

Anguilla suited him well. When he moved there 30 years ago, there was no income tax. After financial problems, an income tax of 3 percent was introduced a few years ago.

Until recently, the country’s main sources of income were tourism and tax evaders.

The tourists come for the beaches and the sun. Tax-averse business leaders registered their companies there. Anguilla lured with tax freedom and little transparency.

Considering that the country has 15,000 inhabitants, seven banks, 50 insurance companies and more than 50 investment funds are impressive.

TV and Swedish conflict over .nu

Anguilla is not alone in milking its internet domain. The Pacific nation of Tuvalu has long cashed in on businesses that want “.tv” in their URL.

Estimates suggest that the country with 12,000 inhabitants can earn NOK 100 million a year from selling internet names. So far, the income has financed electricity for remote islands and covered expenses when Tuvalu became a member of the United Nations.

It has not been as easy for Niue, which is also located in the Pacific Ocean. For 20 years they have fought to get the right to “.nu”. The New York Times recently told the story.

Towards the end of the 1990s, the government received an offer that was apparently so good that it could not refuse. An American businessman promised to give the country internet connection. the only thing he should have in exchange was the right to manage “.nu”.

Older readers of Aftenposten know that “nu” is conservative Norwegian for “now”. But in Sweden, Denmark and the Netherlands you still write “nu”. Many companies see that it is a nice word to include in their website name.

After Niue broke the contract with the businessman, the domain has been managed by the Swedish Internet Foundation. Last winter, Nieu lost after a long trial in Swedish courts. In a press release, the judge said that the foundation follows all current rules.