.COM vs .AI: Choosing the right domain name for your startup

Market context and industry trends: The AI industry is experiencing unprecedented growth, with major tech companies investing over $200 billion in 2024 and projections showing market value exceeding $400 billion by 2027.

• AI companies are demonstrating faster revenue generation compared to non-AI tech companies
• The .ai domain extension has emerged as the second most popular choice for newly funded startups, capturing 7.6% of the market
• Traditional .com domains maintain dominance with over two-thirds of new startups choosing this extension

Domain preferences and credibility factors: Recent research reveals distinct patterns in how different demographics perceive domain extensions for AI companies.

• The .com extension remains the most trusted option overall, though .ai domains show stronger appeal among younger demographics (18-24 age group)
• Adding extra words to domain names (beyond “AI”) reduces credibility for 96% of customers
• Single English words or short, pronounceable names enhance brand credibility and improve chances of securing funding

Notable market examples: Current industry leaders demonstrate diverse approaches to domain selection.

• Major players like OpenAI, Tempus, and UiPath opt for .com domains, often using compound names or non-English words
• Successful companies utilizing .ai domains include Character.ai, Perplexity.ai, and Claude.ai, typically featuring single English-language words
• The highest publicly reported .ai domain sale was you.ai at $700,000, while single-word .com domains can command seven-figure prices

Strategic considerations for startups: Domain selection should align with long-term business strategy and target audience.

• .ai domains offer greater availability and often lower initial costs compared to .com alternatives
• The AI.com format presents a practical compromise, combining .com credibility with AI branding
• Payment plans can make premium .com domains more accessible than they initially appear
• Companies should consider whether AI will remain a key differentiator or become standard integration in their industry

Future implications and market evolution: The increasing integration of AI across industries may influence domain strategy decisions.

• As AI becomes a standard feature rather than a unique selling proposition, .ai domains might lose their distinctive value
• Startups must balance immediate branding benefits against potential future pivots or expansions beyond pure AI focus
• The competitive landscape suggests domain selection will continue to play a crucial role in establishing market presence and credibility