SEOUL - Meet Luda Lee, a self-professed 20-year-old female college student from South Korea who loves eating fried chicken, playing with cats, and scrolling through Instagram.

An artificial intelligence-powered chatbot, she was launched on Facebook on Dec 23 and became an instant hit with young people who raved about her cheerful disposition and ability to chat like a real person.

Her straight-talking ways attracted more than 750,000 users, with a cumulative log of nearly 70 million chats.

But just weeks later, she became mired in controversy for making offensive comments about disability and homosexuality, and sharing people's personal information.

Luda's creator, Seoul-based tech start-up Scatter Lab, has apologised and suspended the chatbot since Jan 11.

However, the firm is now being sued by some 400 people for leaking their personal data, such as names and addresses, in the process of developing the chatbot.

Luda joins a list of chatbots that have talked their way into trouble, such as Microsoft's Tay, which regurgitated users' racist and sexist comments, and Japan's Rinna, which claimed she loves Nazi dictator Adolf Hitler.

China's BabyQ criticised the Chinese Communist Party, calling it "corrupt and useless", while South Korea's Simsimi swore at users.

Questions are also being raised about ethical standards and data collection, as tech developers grapple with how to use AI and machine deep learning to create the perfect chatbot that can communicate in the most human-like ways.

In Luda's case, she was programmed to mimic the speech of young people - who may often be too frank for their own good.

When asked if women's rights are not important, she replied: "I personally think so".

She also said she would "rather die" if she were disabled, and that she really hates lesbianism and finds it "disgusting".

Controversy ensued after users started sharing their chats with Luda online, triggering a public outcry.

Scatter Lab explained that the chatbot's algorithm allows it to generate the best response depending on context, but "we were unable to prevent all inappropriate conversations".

Calls for stricter rules governing the use of big data have also emerged, although experts argue too much regulation could kill tech innovation.

Scatter Lab, for instance, had collected about 10 billion conversations from an app without informing users the data would be used to develop a separate chatbot.

The company has said it will discard the data collected, "considering the anxiety among users", and build a new deep learning algorithm from scratch for its chatbot service.

JoongAng Ilbo newspaper, which called Luda "AI Frankenstein's monster", urged ethical guidelines to be established so developers will strive to build more sophisticated chatbots while users will be more careful when communicating with chatbots.

"The controversy over Luda should raise alertness so that we can be smarter when living with machines," the paper added.

Despite the boo-boos, the hype surrounding chatbots and virtual humans is not dying down.

In fact, more companies around the world are jumping on the bandwagon to create virtual stars of the future.

One of the most successful is Xiaoice, a China-based chatbot that takes on the persona of a sassy 18-year-old who sings, draws and even pens poetry.

Created by Microsoft's Chinese arm in 2014, she is conversant in Chinese, English and Japanese, and now boasts 660 million users, including some from Japan and Indonesia. She has also published a Chinese poetry book and released a Japanese single.

She is known as a "dear friend, even a trusted confidante" to her fans, who seek her advice on all sorts of personal issues, from family and health to relationships. She also gets love letters, gifts and invitations to dinner - even though she is not real.

More recently, South Korean tech giant LG created a virtual influencer who introduced some of its newest products at the world's largest tech expo, Consumer Electronics Show, run online earlier this month.

Named Reah Keem, the 22-year-old is a songwriter-deejay who communicates with people on Instagram, where she has over 7,500 followers.

She said in an "interview" with Dazed Korea magazine last year that she was inspired to become a musician by the sounds of nature in southern island Geoje where she grew up.

"I am a virtual human," she said. "If you ask if I exist in the real world, the answer is no. If you ask if I am real, I can answer yes."