Precision medicine is transforming psychiatric treatment by tailoring personalized healthcare interventions based on clinical, genetic, environmental, and lifestyle factors to optimize medication management. This study investigates how artificial intelligence (AI) and machine learning (ML) can address key challenges in integrating pharmacogenomics (PGx) into psychiatric care. In this integration, AI analyzes vast genomic datasets to identify genetic markers linked to psychiatric conditions. AI-driven models integrating genomic, clinical, and demographic data demonstrated high accuracy in predicting treatment outcomes for major depressive disorder and bipolar disorder. This study also examines the pressing challenges and provides strategic directions for integrating AI and ML in genomic psychiatry, highlighting the importance of ethical considerations and the need for personalized treatment. Effective implementation of AI-driven clinical decision support systems within electronic health records is crucial for translating PGx into routine psychiatric care. Future research should focus on developing enhanced AI-driven predictive models, privacy-preserving data exchange, and robust informatics systems to optimize patient outcomes and advance precision medicine in psychiatry.