The Artificial Intelligence (AI) is transforming healthcare by improving the accuracy of diagnostic tests, simplifying the process of drug discovery, treatment customization, and patient outcomes. The paper will examine the transformative effect of AI in medical practice basing on the developments that have occurred in the period of time, between 2020 and 2025. The most notable ones are AI-based diagnostics, predictive diagnostics in personalized medicine, surgery robotics, and telemedicine virtual assistants. Improved efficiency, fewer errors, and greater accessibility are considered against the difficulties of ethical issues, data privacy, and algorithmic bias, and regulatory barriers. This paper has identified the integration of AI with electronic health records, medical imaging, and genomic data to promote precision medicine. Future directions will focus on agentic AI, drug development generation models, and AI-assisted remote care, which would potentially solve the issue of health disparity in the world. It is important to have equal access, transparency and human control. This discussion highlights the role of AI in transforming healthcare into an active, datadriven, patient-centric model, with more than 50 peer-reviewed sources and industry reports synthesized.