Generative AI has significantly transformed software development by leveraging advanced machine learning models to automate coding tasks, generate code, and enhance productivity. This paper provides an overview and evaluation of modern AI-powered coding tools, including GitHub Copilot, OpenAI Codex, DeepCode, Amazon CodeGuru, TabNine, Kite, and IntelliCode, which use large language models (LLMs) to offer real-time code suggestions, automated error detection, and intelligent code completions. Despite their benefits, these tools face challenges related to accuracy, contextual understanding, security, privacy, and ethical considerations, necessitating thorough review and testing of AI-generated code by developers. The integration of AI in coding also raises concerns about proprietary information protection and ethical implications such as job displacement. This paper explores the capabilities, applications, and limitations of current generative AI tools, highlighting their impact on software development and discussing future directions. Emphasis is placed on the need for improved model training, enhanced contextual understanding, secure AI training methods, and ethical AI usage. By addressing these challenges, the industry can maximize the potential of generative AI, creating more accurate, reliable, and ethically sound tools that support a collaborative and innovative software development environment.