Unfortunately, when a request to the server is initiated all the data from the database is retrieved. Then the data is filtered on the server, and the result is sent to the client. This, however, is different when the RadAutoCompleteBox is bound to a web service; here you are given the possibility to configure the query to the database in a way that it is a less time consuming.
We are already contemplating on changing the way the data is retrieved from the database. This will probably be a task scheduled with a high priority for the next major release.
I am very sorry for the inconvenience caused.
the Telerik team
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