Free energy perturbation (FEP) has become widely used in drug discovery programs for binding affinity prediction between candidate compounds and their biological targets. However, limitations of FEP applications also exist, including, but not limited to, high cost, long waiting time, limited scalability, and breadth of application scenarios. To overcome these problems, we have developed XFEP, a scalable cloud computing platform for both relative and absolute free energy predictions using optimized simulation protocols. XFEP enables large-scale FEP calculations in a more efficient, scalable, and affordable way, for example, the evaluation of 5000 compounds can be performed in 1 week using 50–100 GPUs with a computing cost roughly equivalent to the cost for the synthesis of only one new compound. By combining these capabilities with artificial intelligence techniques for goal-directed molecule generation and evaluation, new opportunities can be explored for FEP applications in the drug discovery stages of hit identification, hit-to-lead, and lead optimization based not only on structure exploitation within the given chemical series but also including evaluation and comparison of completely unrelated molecules during structure exploration in a larger chemical space. XFEP provides the basis for scalable FEP applications to become more widely used in drug discovery projects and to speed up the drug discovery process from hit identification to preclinical candidate compound nomination.