Domain Revenue About 4 Billion More Than Korea
Two Registration Fee Increases in 5 Years Show 'Boldness'
Big Tech 'Preempts' Domains, Korea Sometimes Loses Them
The whole world has been swept up in the AI (artificial intelligence) craze. Governments and companies of all sizes around the globe proclaim that AI holds the future. However, no country or company is actually making money from AI yet. On the contrary, they are pouring funds into research and development. But there is one country that is effectively already making money from AI. That country is Anguilla, a British overseas territory located in the Caribbean region of Latin America.
This country earns about 14.4 billion KRW annually from its national domain income. Anguilla’s country domain is ‘.ai’. South Korea’s country domain is ‘.kr’. In other words, Anguilla sells domains like ‘samsung.ai’ and ‘hyundai.ai’. The country’s area is 91 km², smaller than Sokcho in Gangwon Province (105 km²), and Dongducheon (95 km²) and Hanam (92 km²) in Gyeonggi Province. Its population is 15,753, which is about 0.03% of South Korea’s 51.73 million.
Although it is such a small place, its estimated income from domains (about 14.4 billion KRW) is roughly 4 billion KRW more than South Korea’s (10.4 billion KRW). Recently, due to the ChatGPT craze, the preference for the domain has increased for reasons such as “just by looking at the address, it looks like an AI company” and “it’s easier to get investments.” In fact, the number of ‘.ai’ domains surged by 21.6%, from 128,126 in December last year to 155,927 last month. This data is from the global domain registrar ‘Whois’.
Wholesale Price Raised Twice in 5 Years
Korea's leading domain registration company, Gabia, charges 300,000 KRW for a two-year registration. The registration is done through a company called Key Systems. Key Systems is an official registrar that directly deals with the Anguilla side. Gabia acts as an "agent of an agent," so to speak, making it a "sub-agent." Therefore, the price is relatively higher compared to foreign countries. (Photo by Internet capture)
Country domains, classified as top-level domains, are traded in a structure where government agencies receive commissions from domain registrars, and the registrars sell to the public. Simply put, the commission is the ‘wholesale price’, and the registrar’s selling price is the ‘retail price’. However, unlike ‘.com’ or ‘.kr’, which can be contracted annually, ‘.ai’ domains can only be contracted in two-year increments.
Anguilla charges a wholesale price of $140 for new registrations and renewals. Currently, with 155,927 ‘.ai’ domains, this generates an income of $21.82 million every two years. Converted to an annual basis, that is $10.91 million (about 14.4 billion KRW). This is over 3% of its GDP ($300 million). In 2018, domain income was $2.9 million, which has tripled in five years. This is thanks to the domain count roughly doubling and the wholesale price being raised twice (from $100 to $140).
South Korea’s income from country domains such as ‘.kr’ was 10.4 billion KRW last year. The Korea Internet & Security Agency (KISA), which manages the domains, receives a commission of 9,500 KRW per transaction from registrars. The number of registered country domains in South Korea was 1,084,911. Since there is little chance of significant increase or decrease, the number has remained around one million for the past five years. During this period, Anguilla has overtaken South Korea.
Big Tech Owns Domains, Naver and Daum Lost Out
Major big tech companies own ‘.ai’ domains. Google (google.ai), Microsoft (microsoft.ai), and Meta (facebook.ai) direct to their AI-related sites. Amazon (amazon.ai) redirects to ‘amazon.com’. However, OpenAI, the parent company of ChatGPT, does not own ‘openai.ai’. Another company providing AI image synthesis services uses it. OpenAI’s address is ‘openai.com’.
In South Korea, ‘kakao.ai’ and ‘clova.ai’ are representative users of the ‘.ai’ domain. However, ‘daum.ai’ and ‘naver.ai’ are not owned by Kakao and Naver. Someone else has preempted them. The owner of ‘daum.ai’ recently posted on Danggeun Market that they would sell it for 1.43 billion KRW, which caused a stir.
In fact, transactions of ‘.ai’ domains are actively taking place. In 2020, ‘expert.ai’ was traded for $107,495 (about 140 million KRW), the highest price so far. Next was ‘music.ai’, sold for $101,500. The enthusiasm is expected to continue for the time being. A U.S. domain registrar said, “Inquiries related to .ai domains have tripled this year.”
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