The emergence of Artificial Intelligence (AI) in drug discovery marks a pivotal shift in pharmaceutical research, blending sophisticated computational techniques with conventional scientific exploration to break through enduring obstacles. This review paper elucidates the multifaceted applications of AI across various stages of drug development, highlighting significant advancements and methodologies. It delves into AI's instrumental role in drug design, polypharmacology, chemical synthesis, drug repurposing, and the prediction of drug properties such as toxicity, bioactivity, and physicochemical characteristics. Despite AI's promising advancements, the paper also addresses the challenges and limitations encountered in the field, including data quality, generalizability, computational demands, and ethical considerations. By offering a comprehensive overview of AI's role in drug discovery, this paper underscores the technology's potential to significantly enhance drug development, while also acknowledging the hurdles that must be overcome to fully realize its benefits.