The richest person on the planet believes there are times when profits should not be the sole motivating factor for entrepreneurs.
"Science that helps poor people is where capitalism really doesn't have the right incentive," Microsoft co-founder and philanthropist Bill Gates told CNBC in an interview that aired on "Squawk Box" on Tuesday. "Science in general is underfunded because the benefits to society are greater than what comes back to the inventor. So there's a certain risk averseness."
"We use this thing called grand challenges, where we solicit ideas," he said. "One that got more headlines, it's one of 80 we've done, we solicited the idea of a new condom. That was less unattractive."
The Bill & Melinda Gates Foundation—funded mostly by the fortune Gates amassed at Microsoft and a massive grant from Berkshire Hathaway chief Warren Buffett—is also working on projects such as trying to eradicate the mosquito-borne disease malaria, which according to the Centers for Disease Control and Prevention killed nearly 600,000 people in 2013, mostly children in Africa.
"We're nowhere near solving malaria," Gates said, but added he's energized about the idea of "challenging the very best scientists" to work on big problems.
Gates was joined by his wife Melinda Gates and Buffett at Berkshire's annual shareholder meeting in Omaha, Nebraska. Bill Gates is on the Berkshire board of directors.
Buffett—who pledged much of his fortune to the Gates Foundation in 2006 and serves as a trustee—said he's particularly excited by the work Melinda Gates is doing around family planning and "what happens when people really aren't in control of the family size. … That took some guts to do, and I think it's had a huge impact."