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This paper explores the application and development trends of artificial intelligence (AI) technology, particularly machine learning and natural language processing in the field of failure analysis. Failure analysis is a crucial method for ensuring the reliability and safety of equipment, and is widely used in aerospace, automotive manufacturing, electronic devices, and other fields. Traditional failure analysis methods often rely on expert experience, which is time-consuming and laborious. By integrating AI’s powerful data processing capabilities with traditional methods, the accuracy and efficiency of analysis have been significantly enhanced. In terms of failure mode diagnosis, AI can rapidly and accurately identify various fault modes and provide precise diagnostic results. In failure cause diagnosis, AI integrates data from multiple sources to uncover complex failure factors and potential causal relationships, improving diagnostic reliability. In failure prediction, machine learning can accurately forecast material lifespan and strength, reducing experimental time and costs. In failure prevention, AI offers new approaches to effectively reduce the risk of failure and lower product maintenance costs. The paper also looks forward the future development prospects of AI in failure analysis and highlights challenges and recommendations in the areas, such as data quality improvement, model optimization, interdisciplinary collaboration, and ethical and safety issues.