Step 2: The NavMesh
Ensure the navigation window is visible by selecting Window -> Navigation. Select the floor and all obstacles in your scene. Then, in the navigation window under the Object tab, mark the box labeled Navigation Static. After you click bake, you should have something that looks like this.
Now that the NavMesh is built, you will need to construct a NavMesh agent. First create a default cylinder. Next assign it the Nav Mesh Agent component in Component -> Navigation -> Nav Mesh Agent.
With both elements of the NavMesh in place, you can proceed to constructing the code that will dictate the AI’s movement.