The advent of AI in medicine has transformed various medical specialties, including orthodontics. AI has shown promising results in enhancing the accuracy of diagnoses, treatment planning, and predicting treatment outcomes. With the growing number of AI applications and commercially available tools, there is an increase in their usage in orthodontic practices worldwide. This review aims to explore the principles of artificial intelligence (AI), its applications in the diagnostic process of modern orthodontic practices, and concerns associated with the implementation of AI algorithms in clinical practice. A comprehensive review of the literature was conducted, focusing on five categories where AI has been applied in orthodontics: dental diagnostics, cephalometric evaluation, skeletal age determination, temporomandibular joint (TMJ) evaluation, and extraction decision making. AI has demonstrated high efficacy in all those fields. However, variations in performance and the necessity of manual supervision indicate that AI should be used cautiously in clinical settings. Nevertheless, the high complexity and potential unpredictability of AI algorithms call for cautious implementation and regular manual validation of results. Continuous AI learning, proper governance, and addressing privacy and ethical concerns are crucial for the successful integration of AI into orthodontic practice.