Can anyone help me with my AI script running through a function for no point?

After looking at the script, I have spotted the issue. You declare the victim value in the loop, this means it's being reset to nil every time the loop runs again. Simply, move the value to the start. So, the code will become something like this:

wait(2)
local runService = game:GetService("RunService")
local Players = game:GetService("Players")

local humanoid = script.Parent
local root = humanoid.Parent.HumanoidRootPart
local Victim

function findPlayer()
    local playerList = Players:GetPlayers()
    for i, player in pairs(playerList) do
        print("finding player")
        if (root.Position - player.Character.HumanoidRootPart.Position).Magnitude <= 5 then
            print("found player")
            return player       
        end
    end
end

while true do
    wait(.1)
    if Victim == nil then
        Victim = findPlayer()
        print("finding player")
    else
        print(Victim)
    end
end