Are .AI domains worth the carrying costs for Domain Investors?

.AI domain names

A couple of years ago I bought five .AI domain names, my go-to for ccTLDs like this is 101Domain as they tend to have the best pricing. Still, .AI domains aren’t cheap no matter where you get them, at $159.98 to register and $179.98 to renew, the carrying costs are high. If you do the math, those five domains cost me $800, and to renew, my costs would have been $900.

The way I picked the names I bought then was looking at one-word .COMs that had sold for over $250,000, and I bought the same in .AI. I did get some offers on my names but all under $1,000 – when it came time to renew I reached out to the people who had made offers, by then they had already picked a different name. So I decided not to spend the $900 to renew.

Could there be a profitable model for domain investors to invest in .AI domains? Sure, but I’d say it comes at a much higher risk profile than most extensions, but that could balance with the increase in demand, it’s hard to say and as I’ve just explained above, I have very limited data so am not pretending to be the expert here in any way.

Here’s the last ten .AI domains that sold, compliments of NameBio:

post.ai974 USD2020-05-17Sedo

Looking at these, the average sale price was just around $500. Also one of these domains, which sold for close to $1,000 whereas sold for $26,000 and I think we can all agree is worth six or maybe even seven figures. Of course, there was just a big .AI domain auction so maybe this is deflating the averages a bit, in reality, these would have sold for more via an inbound offer than through a bulk domain auction.

The highest .AI sale in 2020 was which sold for $21,988 in the same auction that these other names sold in. The second highest .AI sale this year was which sold for $10,500 at Sedo.

So it seems reasonable that a solid one-word .AI can sell in the say $10,000 – $20,000 range. The question is, how many of these do you need to own to have one at the right time where the right buyer comes along, with the right budget, and buys it? Well given that most investors sell 1% of their portfolio a year, but just to give it a shot here let’s say you have a totally kick ass year and sell 5x of the average so 5% of your .AI’s sell.

You’d need to have 20 .AI domains in this scenario to sell one, which would cost $3,199 to register. Now if you sell one of them for $10,000 – you’ve tripled your money, you win, but sell closer to the average for a .AI which is under $1,000 and you’re making a losing bet.

This is why I’m not investing in .AI myself even though I see them as hot domains that more and more startups are gravitating towards. Maybe I’ll change my tune but for now the math doesn’t work. The reality is, you’re probably only going to sell 1% of your .AI names, not 5% which means you’ll need to have 100 names to sell one. That’s $15,998 in registration fees to make one sale in an extension that normally sells for under $1,000.

Well that my two cents, what do you think? Are .AI domains worth the carrying costs for domain investors?

Morgan Linton

Morgan Linton