“Innovations in artificial intelligence are not only making data harder to collect, but also creating much of the data demand. The best times for data collection at scale are still ahead of us,” says Mindaugas Čaplinskas, Chief Executive Officer of IPRoyal. We interviewed him for insights into the current state of the proxy server market.
What’s The Story Behind IPRoyal?
I started my career working at a Lithuanian internet provider and in various marketing roles, which gave me an understanding of how corporations operate and a crucial technical background. At the time, Lithuania was experiencing significant advances in digital infrastructure. With serious investments into broadband networks, data centers, and related fields, it was hard not to notice the potential of these technologies.
Working in the industry gave me a clearer picture of the many opportunities and valuable connections with other highly talented people in the tech industry. Before IPRoyal, I was closely involved in various similar telecommunications, VPN, and proxy startups, some of which, such as NordVPN and Oxylabs, I also co-founded.
Lithuania has a vibrant tech startup ecosystem, and it shaped how Karolis and I eventually approached building IPRoyal. We both had decades of experience in the tech and infrastructure space when we founded IPRoyal in 2020.
Even more importantly, I think, we shared a conviction that there was room for a provider that would combine serious technical knowledge with a willingness to be transparent and educate users. It’s safe to say our assumption was correct as IPRoyal grew to over 100 employees in just a few years while serving over 10,000 business clients worldwide.
How Does IPRoyal Stand Out From Other Proxy Providers?
The market was already saturated when we entered it, with companies competing either on price or pool size. We made a deliberate decision early on to become not just proxy providers, but also to educate users and genuinely help them with their data collection needs while still fostering an ethical approach to scraping.
Such an educational approach, particularly on YouTube, caught even the attention of Google, which wrote a case study and invited us to speak at their Think Global event in Dublin.
At the same time, Karolis and I never let the technical foundations of IPRoyal’s proxy service fall into the background. We know our infrastructure inside and out – maintenance andquality assurance underpin every product decision we make. Every product, from residential proxies to browser extensions, is measured by whether our own engineering team would use it.
This feedback loop is closely linked to the work culture we promote at IPRoyal. We give teams a high degree of freedom, allowing teams to operate with minimal oversight while experimenting and using the products they build. I think it’s one of the most effective ways to drive innovation.
Our experience shows that the traditional proxy server use cases are still strong among users. Web scraping, market research, and price monitoring, among others, continue to grow. The majority of business activity has been primarily online for a long time, and proxy servers enable various digital processes to be possible or more efficient.
What I have noticed changing recently is the scale of data demand for AI training data, which was almost nonexistent a couple of years ago. Businesses are experimenting and building various purpose-specific LLMS and agentic AI tools that require massive datasets. IPRoyal’s proxy network provides high-quality, geographically varied IPs to enable such AI-related tasks at a much larger scale.
We often see the global proxy market trends reflecting this change. Some providers are no longer positioning themselves as tools only for anonymity or scraping. Proxy servers are becoming a part of the data supply chain that makes modern AI tools and data-based business systems possible. I think the market has already adapted, and providers change their standing accordingly.
What are the Biggest Data Collection Challenges?
Everybody’s talking now about the data needs of modern AI systems. I think it’s true that those proxy providers that can answer them reliably, ethically, and at scale will succeed, but the same opportunities also create a problem. AI-powered bot detection algorithms and other systems have also improved due to AI, making it easier to block legitimate automated requests. Collecting publicly available data, which remains legal in most jurisdictions worldwide, is becoming more difficult due to these developments.
Proxy services, including our decisions at IPRoyal, are evolving as a response to these challenges. While quality residential proxy infrastructure remains the basis, managing proxy pools intelligently, rotating identities effectively, and handling CAPTCHA at scale are increasingly important. Many proxy innovations are already using AI-based technologies to improve data collection, and I think it’s safe to assume that many more will.
We have also launched products like Web Unblocker, which uses AI to navigate access restrictions for legitimate use cases, and our Video Scraper API, which is designed specifically to help extract and transform video content. Yet, these tools are still complementary for the projects our users are building. The real basis they can rely on is our reliable and fast proxy server network.
I also want to note the regulatory dimension, which, with the demand for AI training data, falls on companies like IPRoyal. As legislators pay more attention to how AI data is collected, the proxy server market and web scraping community are likely to be regulated more closely as well. I view this as an opportunity to expect clearer rules, especially around issues like ethical IP sourcing and data privacy compliance.
Short-term friction, especially due to advances in AI-powered restrictions, is expected. Providers that can balance ethical and compliance requirements with the large-scale demands of clients will come out on top. IPRoyal is well-positioned to withstand the upcoming challenges, so the direction the industry is moving towards is welcomed.
The Future of The Proxy Server Industry
Since the demand for data in AI training and other business use cases shows no signs of slowing down, I think we can be optimistic about where the industry is heading. IPRoyal isn’t done improving its services, and the golden days of data collection are still ahead of us with much technological potential still left untapped.
The conditions for significant growth are in place, and providers who, like IPRoyal, have steadily invested in their infrastructure quality and compliance measures will pull away from those competing only on their IP pool sizes and prices.
