Artificial intelligence (AI) has become a pivotal tool for medical image analysis, significantly enhancing drug discovery through improved diagnostics, staging, prognostication, and response assessment. At a high level, AI-driven image analysis enables the quantification and synthesis of previously qualitative imaging characteristics, facilitating the identification of novel disease-specific biomarkers, patient risk stratification, prognostication, and adverse event prediction. In addition, AI can assist in response assessment by capturing changes in imaging "phenotype" over time, allowing for optimized treatment plans based on real-time analysis. Integrating this emerging technology into drug discovery pipelines has the potential to accelerate the identification and development of new pharmaceuticals by assisting in target identification and patient selection, as well as reducing the incidence, and therefore cost, of failed trials through high-throughput, reproducible, and data-driven insights. Continued progress in AI applications will shape the future of medical imaging, ultimately fostering more efficient, accurate, and tailored drug discovery processes. Herein, we offer a comprehensive overview of how AI enhances medical imaging to inform drug development and therapeutic strategies.