Are .ai domains over-hyped?

I was looking at online domain auctions. Do you think the ai domains are over hyped? what the big deal? I'm thinking these domain squatters are in over their heads. and the registration is expensive as it is. Then was with this expensive transfer fee I'm seeing?

ChatGPT said:

Yeah, .ai is both hyped and legitimately useful — but the economics are what trip people up.

Why .ai got “hot”

• It’s Anguilla’s country-code TLD, but globally it reads as “AI”, so it became a branding shortcut for AI startups and products.
• Demand has been real: by early 2026 there are ~1M+ .ai domains registered, and Anguilla’s .ai revenue has become a major chunk of its government income.

Are .ai domains overhyped?

For investing/speculating: often yes. A lot of auction pricing is basically “AI mania tax.”
For a business that is clearly AI-first: sometimes it’s worth it, because you get an instant signal and many good names are gone in .com.

The big trap is squatters thinking every “cool word + .ai” is a lottery ticket. With high carrying costs, a lot of them really are over their heads.

Why registration feels expensive

Two main reasons:

1. Mandatory multi-year terms. The registry has a 2-year minimum for registration (and often for renewal).

• Wholesale price just went up. The baseline (registry wholesale) has been about $140 for 2 years, and it’s increasing to $160 for 2 years effective March 5, 2026 (registrars then add markup).

So even before you “win” an auction, you’re committing to premium renewals.

What’s with the expensive transfer fee?

This is the part that feels like a scam until you know the rule:

• With many TLDs, a transfer fee usually includes +1 year.
• With .ai, a transfer can be a special fee that may not add any time at all, depending on the registrar/registry integration. Multiple registrars explicitly warn that a .ai transfer does not extend the expiration date.
• Some platforms/registrars treat transfer as “transfer + required 2-year renewal,” others treat it as “transfer only,” and the registry’s accepted interval is commonly 2 years.

That’s why you might see a transfer fee that looks like a renewal… and still not get extra years (or you may have to pay renewal separately).

Also: auction sites sometimes add their own “transfer/processing” layer on top of registry/registrar costs, so the checkout total can feel brutal.

Practical take (so you don’t get burned)

• If you’re buying to build a real AI brand: pick the name that you’d still be happy paying premium renewals on for 5+ years.
• If you’re buying as an investment: do the math on carrying cost. With $160 per 2 years as a baseline (often higher retail), holding a portfolio gets expensive fast.
• Before you buy, check ONE line item: “Does transfer add years?” If it doesn’t, you’re effectively paying a toll just to move it.

If you tell me the registrar/marketplace you’re looking at (GoDaddy Auctions, Namecheap, Dynadot, Sedo, etc.) and the exact fee breakdown you’re seeing, I’ll translate what each line item actually means and whether it’s a bad deal.

You said:

make an infographic for my blog about this subject