Proxy servers are commonly linked with cybersecurity and online privacy, with much of the public conversation focusing on their association with cybercrime. However, beyond these concerns, proxy servers have become an essential part of modern business operations, research activities and emerging technologies, particularly artificial intelligence (AI).

According to Proxyway's annual market report, which has tracked the commercial proxy server industry since 2019, proxy servers play a much larger role in the digital economy than many people realise.

Proxy servers are computers that allow users to access the internet through a different internet connection. By routing traffic through another device, users can obtain a different IP address, making it appear as though they are browsing from another location or internet service provider.

Although they share similarities with virtual private networks (VPNs), proxy servers differ in one important way. Businesses often operate multiple proxy servers simultaneously instead of relying on a single connection, enabling them to collect publicly available web data on a much larger scale, subject to the policies of individual websites.

Beyond cybersecurity, proxy servers have become a key part of legitimate commercial operations. A well-established industry now provides proxy services to businesses across the globe while working towards responsible self-regulation. Several leading providers generate significant annual revenues by offering enterprises tools for large-scale web access and data collection.

Proxyway surveyed 13 major proxy service providers and found that e-commerce remains the biggest area of demand. Businesses use proxy servers to monitor competitors' product listings and pricing, build price comparison platforms, analyse customer reviews to understand market sentiment and support other commercial intelligence activities.

Proxy servers are also used to detect counterfeit products across online marketplaces and verify that digital advertisements appear in the intended locations.

In the travel industry, proxy technology enables online travel agencies and hotel booking platforms to compare prices and secure competitive deals. Digital marketers rely on proxies to track search engine rankings across different locations, while cybersecurity professionals use them to identify malicious applications online. Researchers and academic institutions also depend on proxy networks to gather extensive datasets, including studies examining media representation of women in workplaces.

Proxy servers are increasingly becoming an important component of the AI ecosystem.

They help facilitate access to the vast volumes of web data needed to train and update large language models. As AI systems continue to evolve through regular retraining, proxy infrastructure supports ongoing data collection efforts.

The report also highlights the growing role of proxy servers in agentic AI, where autonomous AI systems perform tasks on behalf of users.

For several proxy providers, AI-focused clients now represent a substantial share of their customer base. One major industry participant has reported strong year-on-year growth driven partly by rising demand from AI companies, with annualised recurring revenue increasing significantly and further expansion expected, according to the report.

Industry experts stress that proxy servers themselves are neutral technologies whose impact depends on how they are used. Their applications range from cybersecurity investigations and academic research to commercial operations and AI development.

Many established providers have adopted measures to ensure responsible usage. Residential proxy networks are built by obtaining users' consent and offering compensation to participants who contribute their internet connections.

Providers also conduct customer verification, with some requiring identity documents and video-based authentication. Many restrict access to high-risk websites, including government and financial institutions, while continuously monitoring their networks for misuse.

Several companies have also come together under the Ethical Web Data Collection Initiative, a consortium that aims to promote responsible data collection practices, strengthen public confidence and encourage sustainable industry standards.

While debates continue around AI training practices and the use of publicly available web data, proxy servers remain an important part of the internet's infrastructure, quietly supporting many digital services that people use every day.