<p>Artificial intelligence (AI) is reshaping healthcare worldwide, offering new opportunities and challenges for clinicians, patients, and regulators. This review examines the integration of AI in Australian healthcare from 2020 to 2025, focusing on regulation, patient perspectives, privacy, and implementation. It highlights regulatory gaps, risks such as bias and data sovereignty breaches, and the responsibilities of clinicians and organisations. Key challenges include complex frameworks managed by the 15 National Health Practitioner Boards, Ahpra, and the TGA, as well as concerns over algorithmic bias, privacy, and compliance with data laws. Public attitudes reveal a guarded acceptance, shaped by concerns over data ownership and legal custodianship. The review underscores efficiency, personalisation, and accessibility as potential benefits, while privacy risks, entrenched bias, and unclear governance remain significant perils. Despite global growth in healthcare AI, peer-reviewed literature on the legal and professional responsibilities of Australian clinicians is limited. This narrative review provides a national perspective to inform international debates on AI governance. It argues that successful adoption requires stakeholder mobilisation, policy alignment, clinician training, ethical oversight, and transparent communication. A consolidated regulatory and professional framework is essential to ensure innovation strengthens safety, equity, and patient-centred care.</p>