This study focuses on the potential application of Artificial Intelligence (AI) in healthcare and hospitals to improve the quality of services for patients. The research objectives include the investigation of existing AI use cases in healthcare, exploration of potential areas in which AI can best be applied, and identification of the challenges to successful AI application. This research utilizes both primary and secondary data sources to investigate the potential of AI in healthcare and hospitals. The primary data is collected through published research papers, technical reports, and industry news to gain an understanding of the current state of AI applications in healthcare. The secondary data is gathered from expert opinions with experienced healthcare professionals such as physicians, hospital administrators, and IT experts to gain insights into existing use cases and potential applications of AI in healthcare and hospitals. The results of the study demonstrate that AI has a significant potential to deliver enhanced outcomes in various aspects of healthcare and hospitals, including diagnosis, treatment, and management. However, the successful integration of AI requires overcoming numerous challenges such as regulatory standardization, privacy protection, and data availability. To foster a positive development of AI in healthcare, it is recommended that healthcare organizations enhance their digital capabilities, enable secure data sharing and collaboration, and use AI tools to deliver a more comprehensive and personalized patient care experience.