The placebo response is a highly complex psychosocial-biological phenomenon that has challenged drug development for decades, particularly in neurological and psychiatric disease. While decades of research have aimed to understand clinical trial factors that contribute to the placebo response, a comprehensive solution to manage the placebo response in drug development has yet to emerge. Advanced data analytic techniques, such as artificial intelligence (AI), might be needed to take the next leap forward in mitigating the negative consequences of high placebo-response rates. The objective of this review was to explore the use of techniques such as AI and the sub-discipline of machine learning (ML) to address placebo response in practical ways that can positively impact drug development. This examination focused on the critical factors that should be considered in applying AI and ML to the placebo response issue, examples of how these techniques can be used, and the regulatory considerations for integrating these approaches into clinical trials.