Learn Italian: Ti abbraccio sempre.

In Italian, direct object pronouns like ti (you) are placed right before the conjugated verb. While in English we say "I hug you," Italian structures it as "You [I] hug" (Ti abbraccio).

Where is the word for "I" in this sentence?

The "I" is built directly into the verb. Abbraccio is the "I" form of the verb abbracciare (to hug). Because the -o ending already tells us who is doing the action, you don't need to add the word io (I).

Could I put sempre before the verb, like Ti sempre abbraccio?

No, because the pronoun (ti) and the verb (abbraccio) must stay glued together. Nothing can come between them. Adverbs like sempre (always) generally go right after the verb in Italian, giving us Ti abbraccio sempre.

Does ti mean a formal or informal "you"?

Ti is the informal, singular "you" used for someone you know well. You would use this sentence with a friend, family member, or partner.