This article explores the potential uses, benefits, and challenges of artificial intelligence (AI) tools for teacher educators and their teacher candidates. It begins with a brief introduction to the topic, followed by a discussion of existing literature concerning the impact of AI on K-12 education; the importance of preparing AI-literate teachers; and specific issues related to AI's use in teacher education, which includes studies on perceptions about AI utilization in education. The author also examines the challenges of AI implementation in the preparation of teachers; poses critical questions and ethical, pedagogical, and philosophical concerns faculty and students must consider; and provides ideas on using AI tools in courses through exemplar activities. The various activities illustrate the integration of AI- and non-AI-based activities to promote AI literacy among teachers. The goal of these activities is to support candidates' competency development to become effective teachers while understanding the potential of AI tools for assisting in planning instruction and creating curricula. The exemplars also focus on developing critical thinking, creativity, and collaboration in carrying out pedagogical tasks. The author advocates for embracing AI tools in education cautiously and strategically by recognizing their power to transform teaching and learning for teachers and students.