South Korea’s data protection authority announced plans on Friday to formally question Chinese startup DeepSeek about its management of users' personal information following the launch of its new AI chatbot, R1.

DeepSeek claims the R1 model rivals top AI systems in the United States at a fraction of the investment costs incurred by American tech giants.

The chatbot's debut triggered a sharp selloff in the tech sector, with Nvidia shares plummeting 17 percent on Monday. The development also sparked concerns over the massive investments made in AI over recent years.

"We plan to submit our inquiry in writing by Friday to gather information on DeepSeek's handling of personal data," a representative of South Korea's Personal Information Protection Commission told AFP, without providing further details.

Similar concerns have emerged in other countries. Italy recently launched an investigation into DeepSeek's R1 model, banning it from processing data from Italian users. The Italian Data Protection Agency is seeking details on how user information is sourced and disclosed, particularly regarding internet-sourced data.

France’s data watchdog, CNIL, has also expressed interest in questioning DeepSeek to gain insight into its chatbot operations and assess potential data protection risks.

DeepSeek has stated that it developed its AI model using H800 chips, which were permitted for sale to China until 2023 under U.S. export restrictions.

The news rattled South Korea's stock market as it reopened Friday after an extended break. Samsung Electronics shares fell over two percent, while SK hynix shares dropped nearly 12 percent at one point.

Both Samsung and SK hynix are major suppliers of advanced chips essential for powering AI servers.