The new era of nanomedicine offers significant opportunities for cancer diagnostics and treatment. Magnetic nanoplatforms could be highly effective tools for cancer diagnosis and treatment in the future. Due to their tunable morphologies and superior properties, multifunctional magnetic nanomaterials and their hybrid nanostructures can be designed as specific carriers of drugs, imaging agents, and magnetic theranostics. Multifunctional magnetic nanostructures are promising theranostic agents due to their ability to diagnose and combine therapies. This review provides a comprehensive overview of the development of advanced multifunctional magnetic nanostructures combining magnetic and optical properties, providing photoresponsive magnetic platforms for promising medical applications. Moreover, this review discusses various innovative developments using multifunctional magnetic nanostructures, including drug delivery, cancer treatment, tumor-specific ligands that deliver chemotherapeutics or hormonal agents, magnetic resonance imaging, and tissue engineering. Additionally, artificial intelligence (AI) can be used to optimize material properties in cancer diagnosis and treatment, based on predicted interactions with drugs, cell membranes, vasculature, biological fluid, and the immune system to enhance the effectiveness of therapeutic agents. Furthermore, this review provides an overview of AI approaches used to assess the practical utility of multifunctional magnetic nanostructures for cancer diagnosis and treatment. Finally, the review presents the current knowledge and perspectives on hybrid magnetic systems as cancer treatment tools with AI models.