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Recent advances in machine learning have stimulated widespread interest within the Information Technology sector on integrating AI capabilities into software and services. This goal has forced organizations to evolve their development processes. We report on a study that we conducted on observing software teams at Microsoft as they develop AI-based applications. We consider a nine-stage workflow process informed by prior experiences developing AI applications (e.g., search and NLP) and data science tools (e.g. application diagnostics and bug reporting). We found that various Microsoft teams have united this workflow into preexisting, well-evolved, Agile-like software engineering processes, providing insights about several essential engineering challenges that organizations may face in creating large-scale AI solutions for the marketplace. We collected some best practices from Microsoft teams to address …