Lore in Mario.ai Community

Mario.ai resembles Mario but with a more darker appearance, including a shadow over his "eyes" from his cap and a big eye in the center of his face. AI is extremely aware of the player's existence and would do anything to hurt them

So AI now rests in the title screen demo thing when you load up the game.

but was replaced with a playable Mario instead after Shigeru Miyamoto said that the idea of an AI testing the game (at the time) wasn’t a good idea at all because the point of a game is to play it, not have an AI do it for you.

Mario.ai (or just AI) is an advanced AI possessing a very specific cartridge of Super Mario Bros developed in the Nintendo Headquarters. AI was originally used for bug fixes or testing the game’s performance