Tuya Smart (NYSE: TUYA; HKEX: 2391), a leading global AI cloud platform service provider, have announced a partnership with Advance, an international technology company specializing in innovative consumer electronics and AI-powered products, to co-develop and commercialize BUBU the Owl, a flagship AI-powered companion toy designed for children. This partnership marks one of the first deployments of Tuya's AI companion solution in Latin America, underscoring both companies' commitment to bringing physical AI into everyday family life.

According to a report by The Business Research Company, the global AI toy market reached approximately US$18.35 billion in 2025, with strong growth momentum expected in the years ahead. This evolution reflects a broader industry paradigm shift into Physical AI — the integration of advanced AI into physical devices that can sense, respond, and act in the real world.

From Toy to Companionship: BUBU the Owl

Advance’s flagship product, BUBU the Owl, is an AI-powered toy featuring expressive animated eyes rendered on a 1.28-inch dynamic display, Hi-Fi stereo audio, touch-response interaction, and natural voice dialogue powered by leading large language models — including ChatGPT, Grok-3, and Doubao, deployed regionally. BUBU is redefining what a children’s toy can be — a safe, intelligent companion that listens, responds, and grows with the child.

With more than 10 animated facial expressions and real-time voice detection, BUBU creates a uniquely interactive experience that goes far beyond conventional smart toys — responding not just to commands, but to the emotional cadence of a child's conversation. BUBU is engineered for the multilingual diversity of global families, supporting more than 66 languages, and is constructed entirely from child-safe materials, including premium polyester plush, silicone, and plastic.

At the core of BUBU's hardware architecture is Tuya's T5-AI Voice Box — a voice interaction AI box based on the T5-E1, an embedded Wi-Fi and Bluetooth Low Energy combo module developed by Tuya. Supported by major AI models and featuring button wake-up, wake-word activation, and free conversation capabilities, the T5-AI Voice Box empowers BUBU with immersive and engaging AI voice interaction experiences. Connectivity runs over the 2.4 GHz Wi-Fi band via Tuya's module, delivering the stable, low-latency performance that real-time voice conversation demands.

Device connectivity, parental controls, and usage management are handled seamlessly through the Tuya Smart App on both Android and iOS platforms, enabling parents to configure content settings, monitor interaction history, and manage language preferences from a single interface. The cross-platform compatibility of the Tuya ecosystem also supports Advance's global go-to-market strategy, enabling a consistent product experience regardless of the device a family uses.

Advance, backed by extensive distribution expertise in edutainment devices and a retail presence across Central and South America, is uniquely positioned to drive AI toy category adoption across the region. Following successful trial sales launched in Peru in October 2025 — which received strongly positive market feedback — the first commercial production batch was completed in the second quarter of 2026, positioning BUBU for broader regional rollout across Latin America. As BUBU scales to new markets, Tuya's global platform infrastructure is built to support millions of connected devices without compromising performance — giving Advance the confidence to pursue regional expansion without re-engineering the platform beneath the product.

Accelerating the Deployment of AI Toys in Latin America

Advance is among the earliest consumer brands to bring a Tuya-powered AI toy to market at commercial scale, validating the technical readiness and commercial viability of Tuya's AI platform to support mass-market physical AI deployment.

By leveraging Tuya’s SDK and Smart App framework, the partnership demonstrates the versatility of Tuya’s Platform-as-a-Service (PaaS) model: enabling hardware brands with deep manufacturing and distribution competencies to rapidly develop and commercialize sophisticated AI-native products with a consistent global reach — without needing to build AI infrastructure from scratch.

For child-facing products like AI toys, Tuya adheres to stringent security and compliance standards to ensure safe experiences for children and families around the world. Tuya's proven platform, with a presence spanning more than 200 countries and regions, gives Advance the confidence to grow from early adopters to mass-market deployment without re-platforming — a critical assurance as BUBU expands from Peru across Latin America and into global markets.

"BUBU the Owl represents everything we believe the next generation of children's products should be — safe, deeply intelligent, and genuinely delightful to use. Partnering with Tuya has allowed us to bring this vision to life with speed and technical depth. We see BUBU not just as a single product, but as the foundation of an entire AI toy ecosystem that we will develop and expand across Latin America and international markets over the coming years," said Nestor Quispez-Asin, Managing Director at MicroSource Shenzhen & Technosource HK, Ltd.

"Advance exemplifies the kind of innovative, globally minded partner that Tuya's platform was built to empower. By combining Advance's manufacturing expertise and distribution strength with Tuya's technologies and AI cloud platform, we have demonstrated that AI-native consumer devices can be brought to market efficiently, reliably, and at commercial scale. We are proud to support the development of BUBU and look forward to deepening our collaboration as it grows the AI toy ecosystem across new markets and new product lines," said Johnny Lu, Business Director for LATAM of Tuya.

Moving Forward and Beyond in the AI Toy Market

BUBU will serve as the entry point for Tuya and Advance’s joint commercialization of AI toys in the global market. The companies will continue to improve BUBU with enhanced parental analytics, deeper AI integration, and expanded learning capabilities to deliver more conversational, personalized experiences, among other enhancements.

Advance plans to grow its AI product portfolio beyond BUBU, with additional AI toy characters and AI-powered learning devices currently in development — all built on the Tuya platform. As these new products come to market, Tuya's unified AI cloud platform and ecosystem will serve as the shared backbone, enabling Advance to scale consistently across product lines and geographies.

With proven success in Peru, Advance is now in active discussions to extend BUBU's commercial reach across additional Latin American markets and is exploring distribution opportunities in Europe, the Middle East, and Southeast Asia. Tuya's global presence will provide the reliability and regulatory readiness required to support this international expansion — ensuring a consistent, premium connected experience for families worldwide.

Together, Tuya and Advance aim to establish AI toys as a mainstream consumer category in Latin America and beyond, leveraging physical AI not just as a technology milestone, but as a meaningful advancement in how children learn, play, and grow.

About Advance

Advance designs and develops innovative technological products, combining hardware, artificial intelligence, connected devices and embedded electronics.

Based in Shenzhen, at the heart of the global technological innovation ecosystem, Advance transforms ideas into tangible products, from design through to industrialisation.

Our ambition is to create useful, accessible and innovative technologies capable of meeting the needs of tomorrow’s consumers and businesses.