AI in Drug Discovery: Clinical Failures, Regulatory Reality, and the Validation Crisis Behind the Hype

The integration of artificial intelligence (AI) into the life sciences has accelerated significantly between 2022 and 2026, accompanied by global investment exceeding USD 100 billion and widespread expectations of a transformative impact in drug discovery. Despite these advances, the extent to which AI has improved clinical outcomes remains unclear. This study presents a structured narrative review evaluating the economic, technical, clinical, and regulatory dimensions of AI adoption in drug discovery. Current evidence indicates that clinical attrition rates remain high, with approximately 90% of drug candidates entering clinical development failing to achieve regulatory approval. Although AI systems such as AlphaFold have achieved high structural prediction accuracy, with predicted local distance difference test (pLDDT) scores exceeding 90 for well-structured proteins and root mean square deviation (RMSD) values comparable to experimental methods, limitations persist in modelling protein dynamics, post-translational modifications, and protein-ligand interactions. Clinical case studies demonstrate that while AI can accelerate early-stage discovery timelines, these advantages do not consistently translate into improved late-stage success rates. Furthermore, reproducibility challenges, limited data transparency, and regulatory gaps continue to constrain reliable implementation. These findings suggest that AI in drug discovery is currently in a transitional phase characterised by high investment but limited validated clinical impact. Future progress will depend on strengthening validation frameworks, improving data sharing practices, and aligning regulatory standards with real-world clinical performance.