Building an AI-powered chatbot involves several key steps. If I were to create one, I'd start with defining its purpose and the problems it will solve. We should outline the specific tasks the chatbot will handle, such as answering FAQs, assisting with customer service, or providing product recommendations.

The next step is selecting the right AI technology. They typically use natural language processing (NLP) tools and machine learning algorithms. I would recommend using platforms like Google Dialogflow, Microsoft Bot Framework, or IBM Watson for their robust AI capabilities. These tools help in creating a chatbot that can understand and respond to user queries effectively.

Once the technology is in place, we design the chatbot's conversation flow. This includes mapping out how it will interact with users and handle various scenarios. They must ensure that the dialogue is natural and engaging.

After building and training the chatbot, testing is crucial. We need to test it with real users to identify any issues and refine its responses. They should gather feedback and make necessary adjustments to improve its performance.

Finally, deploying and monitoring the chatbot will ensure it functions well and continues to meet user needs.