In a CNBC exclusive interview, Berkshire Hathaway Chairman & CEO Warren Buffett discusses succession, railroads, the newspaper business, Newscorp's bid for Dow Jones & Company, private equity, China and the markets, among other topics.

DATE: Monday, May 7th
NETWORK: CNBC
PROGRAM: "Squawk On The Street"
TIME: 9:30 am ET

Transcript below. All references must be sourced to CNBC.

MARK HAINES: THANK YOU RICK SANTELLI. THAT TIME OF YEAR AGAIN WHEN INVESTORS FROM ALL OVER THE WORLD CONVENE IN WHAT MAY SEEM LIKE THE MOST -- IT'S HOME TO INVESTING ICON TO WARREN BUFFETT. WE'RE TALKING ABOUT OMAHA NEBRASKA WHERE I WAS ONCE 35 YEARS AGO. I ASSUME IT'S CHANGED. THE BERKSHIRE HATHAWAY ANNUAL SHAREHOLDER MEETING IS GOING ON.= LET'S GET STRAIGHT TO LIZ CLAMAN INSIDE COMPANY'S HQ AND SHE HAS A SPECIAL GUEST.

LIZ CLAMAN: MARK IT IS NOT FOR JUST THE GREAT STEAK. YOU HAVE TO COME BACK TO OHM HASM HAH. I KNOW YOU AND I HAVE -- OMAHA. YOU AND I HAVE BEEN WATCHING THE SEA CHANGE. BERKSHIRE HATHAWAY DRAGS IT OUT AN ENTIRE WEEKEND OF FESTIVITIES AND MEETINGS AND QUESTION-AND-ANSWER SESSIONS, BUT IT IS NOT OVER. THE BOARD OF DIRECTORS MEETS TODAY IN OMAHA. I WAS ABLE TO CORRAL WARREN BUFFETT THE CHAIRMAN AND CEO OF BERKSHIRE HATHAWAY ON HIS WAY UP TO THIS BOARD OF DIRECTORS MEETING. THANK YOU VERY MUCH FOR LETTING ME GRAB YOU FOR A MINUTE HERE.

WARREN BUFFETT: MY PLEASURE.

LIZ: APPRECIATE IT. WHAT IS THE NUMBER ONE THING THAT'S GOING TO BE ON THE AGENDA THE BIG THING FOR BOARD OF DIRECTORS AT BERKSHIRE TODAY?

BUFFETT: EVERY TIME WE MEET THE BIGGEST THING IS WHAT HAPPENS AFTER I'M NOT HERE. SO WE TALK ABOUT THE CANDIDATES FOR SUCCESSOR. WE'VE GOT THREE TERRIFIC ONES. WE KNOW WHICH ONE IS THE NUMBER ONE. BUT I GO THROUGH THE SITUATION EVERY TIME WITH THE DIRECTORS THEY ASK A LOT OF QUESTIONS.I TELL THEM ABOUT THE THREE, ANDWE TALK IT OUT, AND THEN THEY TALK IT OUT WHEN I'M NOT IN THE ROOM ALSO.BUT WE ALWAYS SPEND A THIRD OF OUR TIME OR HALF OF OUR TIME ON THIS THAT.

LIZ: YOU ARE TALKING ABOUT THREE FOR THE CEO CANDIDACY. BUT THE CIO THE CHIEF INVESTMENT OFFICER CANDIDACY WHICH YOU ALMOST PRESENTED TO THE WORLD AS AN OPPORTUNITY TO BE AN APPRENTICE. IS THAT JUST GOING TO BE ONE CANDIDATE OR MORE THAN THAT?

BUFFETT: ALTHOUGH THERE WILL BE A NUMBER OF CANDIDATES AND THERE WILL PROBABLY -- WE COULD VERY EASILY HIRE MORE THAN ONE AND THEN SEE HOW THEY PLAY OUT OVER TIME GIVE THEM EACH A BLOCK OF MONEY TO RUN FOR A FEW YEARS AND LOOK AT WHO MIGHT SCALE UP THE BEST BECAUSE THAT'S THE REAL THING. THERE'S A LOT OF PEOPLE CAN RUN A BILLION DOLLARS WELL OR TWO BILLION BUT THEY HAVE TO BE ABLE TO RUN 100 BILLION WELL. IT COULD BE BE TWO OR THREE TO SPLIT THE JOB UP.

LIZ: IT COULD TAKE FOUR PEOPLE TO REPLACE YOU?

BUFFETT: WE'VE GOT ONE PROPOSAL FROM A 4-YEAR-OLD. MAYBE A 4-YEAR-OLD COULD REPLACE ME OR BETTER YET A CAVEMAN COULD REPLACE ME, BUT THERE COULD BE SEVERAL PEOPLE IN THE INVESTMENT JOB. THERE WILL BE ONE CEO OBVIOUSLY.

LIZ: WHEN WILL WE KNOW?

BUFFETT: WE MAY NOT KNOW -- WE MAY NOT HIRE ANYBODY FOR CLOSE TO A YEAR. I MEAN, WE'VE GOT 700 APPLICATIONS. WE'LL NARROW IT DOWN TO 20 OR 30. I WILL TALK TO A LOT OF THEM. IT COULD TAKE UP TO A YEAR TO PICK TWO OR THREE.