1 Draw a circle with the Ellipse tool (L). Hold Shift while drawing to constrain it to a perfect circle.
2 Duplicate the circle by using the Selection tool (V) and Option+click and drag (Mac) or Alt+click and drag (PC) the shape. Hold Shift while duplicating the shape to keep it directly in line with the original shape.
3 Use Command+D (Mac) or Ctrl+D (PC) to duplicate the shape several times.
Duplication and Pathfinder
4 Duplicate the first row of circles, moving them halfway up on the first line. Repeat this for four lines. Delete a few circles from each line, ending up with one at the top. Select all the circles with the Selection tool.
5 Apply the Unite mode from the Pathfinder panel to create one shape.
6 You’ve creates one solid cloud from several circles.
Pathfinder Tool/Corner Widgets
7 Draw a rectangle and move it over the base of the clouds. Select the clouds and the rectangle and choose the Minus Front mode from the Pathfinder panel.
8 Select the lower two corners of the rectangle with the Direct Selection tool: this will show the corner widget targets.
9 Pull the corner widget targets in toward the center of the cloud to round them.