When tech entrepreneur Ian Leaman needed to buy a website address for his new artificial intelligence start-up he found that he had an expensive problem.
The New Yorker had named his business Pantry AI, so in December of last year he decided to see if the domain name Pantry.ai hadn't already been taken.
Unfortunately someone else had already registered it a number of years previously, so Mr Leaman had to get in touch with that person to see if he could strike a deal to buy it from him.
"I offered $2,000 [£1,647] and he said he only wanted $12,000," says Mr Leaman. "Then I offered $7,000 and he remained stuck on $12,000.
"We agreed on $12,000 as long as it could be done with a payment plan."
Now the proud owner of Pantry.ai, Mr Leaman says that as pricey as the deal became, he's happy he has secured a memorable website address that has "a strong noun" within it. The latter is said to be increasingly rare to obtain.
That $12,000 figure may sound high, but it is in fact at the low end of fees now being paid for domain names that include AI. This is especially true if AI is the suffix – the bit after the dot, such as .com or .co.uk.
One web address, npc.ai, was sold for $250,000 this year, while another, service.ai, went for $127,500, according to one report. Such head-turning figures are a side effect of the feverish buzz surrounding AI start-ups and technology.
But how does the system of getting a domain name actually work? Firstly, there are more than 1,000 domain registrars. These are all accredited by a global organisation called The Internet Corporation for Assigned Names.
You go to one of these registrar websites, and type in the name you want. It will then tell you if it is available, or whether it has already been registered.
If the website address is unclaimed then you can simply pay a small amount – as little as £15 a year – to resister it as your own.
On the other hand, if the specific domain name is already registered, but you really want to try and get it, you need to contact something called a domain brokerage. These are businesses that facilitate the buying and selling of website addresses.
The broker will – for a fee – contact the current owner, and see if he or she wants to sell it, and then try to facilitate a deal.
Joe Udemme, chief executive of US-based domain brokerage Name Experts, says that demand for AI-named websites has soared over the past year.
"For those who want .ai suffixes, I'm seeing sales in the low five-figures, and sometimes in the six figures," he says. "The sweet spot for companies is something short and brandable."
The total value of all domain names that include AI rose to $20m in August of this year, compared with $7m a year earlier, according to figures given to the BBC by another broker, Escrow.com.
Meanwhile, a third brokerage, Afternic, says that the term AI is now the second most used word in website addresses sold via its platform.
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"These AI domains are being bought by both start-ups looking for their name online, and those trying to flip those domains to make some money," says Matt Barrie, chief executive of Escrow.
He adds that one domain name speculator bought an AI website name for $300,000, only to then sell it some months later for $1.5m. "There are speculators in the space who realise companies want the best branding."
For AI firms it can make acquiring their website address of choice an expensive business, but Mr Barrie says that getting "a short and clean" one can help a company appear higher on internet search results. He adds that it is also easier for consumers to remember.
"Consider a top domain as a permanent discount on your marketing budget," says Mr Barrie.
Mr Udemme says that the most popular website addresses for AI firms are a single word followed by the .ai suffix.
"The way to look at using a single word is that it becomes beachfront digital real estate," he says. "Once you build that, no one can build in front of you, only behind you."
Mr Leaman agrees, saying he preferred getting Pantry.ai rather than PantryAI.com. His business uses AI to help manufacturers of consumer goods accurately calculate how many products they need to manufacture for future orders.
The surge of AI-related website addresses flying off the online shelves is a movement that is here to stay, says Andrew Rosener, chief executive of domain name brokerage MediaOptions.
"AI isn't a trend like how we saw with crypto… thanks to all the investment capital rushing in, and how companies want to show how AI-forward they are to vendors and customers."
But he warns businesses to avoid buying AI-focused domains simply because the technology is hot right now. "I wouldn't advise clients to be spending exorbitant prices on a domain containing 'AI' just to be part of what's happening now," Mr Rosener says. "Only if your company is AI-centric would that decision make any sense."
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