Model-informed drug development (MIDD) methods play critical role to ensure development of efficacious, and safe individualized therapies. The application of artificial intelligence/machine learning (AI/ML) within the field of drug development has exponentially expanded. Integrating AI/ML into traditional pharmacometrics approaches or using AI/ML as a stand-alone tool has the potential to optimize dosing strategies, inform clinical trial designs, and enhance robustness of quantitative assessments of drug efficacy and safety. This review systematically evaluates the impact of AI-based model-informed drug development (MIDD) methods compared to traditional approaches by blending regulatory perspectives. We conducted a systematic search on PubMed using five Medical Subject Headings (MeSH) terms and included 67 relevant studies in the analysis. The results indicate that AI models have the potential of improving MIDD approaches through different stages of drug development to inform decision-making in clinical trials. However, limitations such as the lack of standardized evaluation metrics and standardized regulatory guidelines on the use of AI-based MIDD methods were noted. Overall, this review highlights the potential applications of AI in drug development and provides a foundation for future research to optimize and integrate AI-based approaches in this field.