Nowadays, railway track monitoring strategies are based on the use of railway inspection vehicles and wayside dynamic monitoring systems. The latter sometimes requires traffic disruption, as well as higher time and cost-consumption activities, and the use of dedicated inspection vehicles is less economical and efficient as the use of in-service vehicles. Furthermore, the use of non-automated algorithms faces challenges when it comes to early damage detection in railway infrastructure, considering operational, environmental, and big data aspects, and may lead to false alarms. To overcome these challenges, the application of artificial intelligence (AI) algorithms for early detection of track defects using accelerations, measured by dynamic monitoring systems in in-service railway vehicles is attracting the attention of railway managers. In this paper, an AI-based methodology based on axle box acceleration signals is applied for the early detection of distributed damage to track in terms of the longitudinal level and lateral alignment. The methodology relies on feature extraction using an autoregressive model, data normalization using principal component analysis, data fusion and feature discrimination using Mahalanobis distance and outlier analysis, considering eight onboard accelerometers. For the numerical simulations, 75 undamaged and 45 damaged track scenarios are considered. The alert limit state defined in the European Standard for assessing track geometry quality is also assumed as a threshold. It was found that the detection accuracy of the AI-based methodology for different sensor layouts and types of damage is greater than 94%, which is acceptable.