The technology industry was shaken up late last year when the start-up Open AI released an updated version of its conversational chatbot called ChatGPT-3. Users started rapidly adopting the service, and it gained hundreds of millions of sign-ups in just a few short months with its human-like language model. To capitalize on this new revolutionary technology, Microsoft (MSFT -0.11%) shook up the industry even further by investing $10 billion into the company while securing exclusive cloud computing access to its Azure infrastructure services. 

This Microsoft-OpenAI partnership now goes even deeper, with the conversational artificial intelligence (AI) tools now powering an updated version of Microsoft's Bing search engine, which is the number-two player in the search market.

With all these developments, investors are concerned about the number-one player in search -- Alphabet's Google (GOOG 0.81%) -- losing market share to this revitalized Bing competitor. However, I think these concerns are vastly overblown. Here's why.

Samsung may leave Google for Bing

Reports came out last weekend that Samsung is considering leaving Google and going with Bing as its default search engine on all its computing devices. Historically, Alphabet has made deals with computer hardware providers like Samsung and Apple, paying them billions of dollars annually to make Google the default search engine on their search applications. While not confirmed, the Apple deal reportedly costs Alphabet around $20 billion a year.

Why would they pay so much just to be the default search engine? Because the search engine advertising business is so profitable, with Google Search bringing in over $160 billion in revenue for Alphabet just last year. If Microsoft/Bing wins these default search engine contracts instead of Google, the theory is it will lead Google's 90%+ market share in search engine usage to decline, leading to a decline in revenue for the company. On a positive note, it would save Google tens of billions in contract fees each year, so we don't know whether it will actually lead to lower or higher earnings when you add everything together.

Google won't go down without a fight

Microsoft took a major shot across the bow with its OpenAI partnership, but it looks like Google is ready to compete aggressively in this cutting-edge AI field. It already released a ChatGPT competitor called Google Bard that has the same sort of lifelike conversational responses to queries. According to reports, it is building AI tools for images and videos, and making major improvements to Google Chrome. Without many details yet, it looks like Google wants to embed more and more AI tools into Google Search and its other products over time, which will hopefully improve the user experience.

Seeing that Google was able to copy ChatGPT within a few months, I have confidence it can match or exceed whatever new products Microsoft/OpenAI releases for customers. This should reassure any investor that is worried Google has gotten complacent with its monopoly-like market share of the search engine market.

Market share on desktop computers is telling

Investors are worried about what will happen if Google loses its default license on mobile devices like Apple and Samsung. But we already have some data on what happens when Google is forced to openly compete with other search engine providers. Even though Microsoft's Windows operating system -- which constantly nudges users to switch from Google to its Bing search engine -- has a majority share of the desktop computer market, Google has still managed to maintain an 85% share of search queries on desktops, compared to Bing's 8.31%. Its internal Chrome operating system only has a 7.47% market share on desktops, for reference.

Google didn't win a dominant position on desktop search because of exclusive contracts, or even because of its search engine superiority. No, it won because of all the free services it offers on top of its core Google Search product, like Google Maps, Photos, YouTube, Gmail, Google Drive, Google Chrome, and Google Calendar. With billions of people around the globe regularly using these free services, Google has built in immense switching costs for its product ecosystem. Ask yourself how much of a pain it would be to eliminate Google products from your life, and whether you'd even want to in the first place. 

Unless Microsoft can -- and is willing to -- offer all these products for free to customers, I don't see it gaining much market share vs. Google, even if it pays up to win these default search engine contracts. This should help Alphabet shareholders sleep well at night despite these new AI technologies.