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CNBC Exclusive: CNBC Transcript: Microsoft CEO Satya Nadella and Aspen Institute's Walter Isaacson Speak with CNBC's Kelly Evans Today

WHEN: TODAY, WEDNESDAY, June 29, 2016

WHERE: CNBC'S "POWER LUNCH"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Microsoft CEO Satya Nadella and Aspen Institute's Walter Isaacson today on CNBC's "Power Lunch." Following are links to video of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000530273 and http://video.cnbc.com/gallery/?video=3000530274.

All references must be sourced to CNBC.

EVANS: ALL RIGHT, BRIAN, THANK YOU. I'M HERE OUT IN ASPEN JOINED BY WALTER ISAACSON OF THE ASPEN INSTITUTE AND SATYA NADELLA, THE CEO OF MICROSOFT. THANK YOU BOTH FOR JOINUNG US HERE. SATYA, YOU'VE BEEN A LITTLE BUSY LATELY. COUPLE PROJECTS YOU'RE WORKING ON, WE UNDERSTAND. AND THAT DIDN'T PREVENT YOU FROM WEIGHING IN ON ARTIFICIAL INTELLIGENCE JUST YESTERDAY TOO. WALK US THROUGH A LITTLE BIT OF WHAT THAT'S ALL ABOUT.

NADELLA: YOU KNOW, AS SOMEONE WORKING AT MICROSOFT AND CREATING A.I. AND BEING AT THE FOREFRONT OF MACHINE INTELLIGENCE, THE THING THAT I'VE BEEN THINKING A LOT ABOUT IS WHAT IS THAT DESIGN PRINCIPLES AND SENSIBILITY THAT SHOULD GUIDE US AS WE BUILD MACHINE INTELLIGENCE? AND TAKING A STANCE ON IT. AS MUCH FOR OURSELVES, QUITE FRANKLY, SO THAT WE ARE PRINCIPLED IN OUR APPROACH TO CREATING A.I. AND THAT'S WHAT IS THE MOT MOTIVATION BEHIND THAT PIECE. I DEFINITELY FALL IN THE CAMP OF THINKING OF A.I. AS AUGMENTING HUMAN CAPABILITY AND CAPACITY. AND THEN DISTILLING A SET OF PRINCIPLES. ALGORITHMICALLY FOR EXAMPLE HOW CAN A.I. BE PROGRAMMED TO CARE FOR HUMANS, NOT HAVE BIAS BUILT IN. HOW CAN IT BE TRUSTWORTHY, HOW CAN IT BE TRANSPARENT? THOSE ARE THE PRINCIPLES OF A.I. DESIGN THAT ARE PRETTY CORE OR AT LEAST HOW I WANT US TO APPROACH AS DESIGNERS OF A.I.

EVANS: WHY DO YOU THINK IT'S SO IMPORTANT, WALTER?

ISAACSON: WELL, YOU KNOW, IT REMINDED ME OF THE ISAAC ASIMOV RULE OF ROBOTS YOU'VE DONE SOME OF THOSE RULES THROUGHOUT THE IDEAS FESTIVAL THIS WEEKEND, EVEN SOME OF THE HEALTH THINGS WE DID, IT WAS A NOTION THAT A.I. WOULD REPLACE DOCTORS, THAT ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING WOULD DESTROY ALL OF OUR JOBS. AND I'M READING SATYA'S PIECE AND I THINK YOU DID IT IN SLATE, AND I BELIEVE LIKE YOU DO, NO, IT AUGMENTS. IT IS SYMBIOTIC. IT HELPS TAKE HUMAN CREATIVITY TO THE NEXT LEVEL. BUT I'D ASK YOU WHAT IS IT THAT HUMANS BRING TO THE PARTY MOST OF ALL? EMPATHY, CREATIVITY?

NADELLA: IN FACT, AS I WROTE THOSE PRINCIPLES THAT WE AS DESIGNERS OF A.I. NEED TO INFUSE INTO THE. A.I. WE CREATE, I WENT ONTO WRITE EVEN ABOUT HOW DO WE AMPLIFY THE HUMAN VALUES AND HUMAN POWERS OF EMPATHY, CREATIVITY, CURIOSITY? THESE ARE THE THINGS THAT ARE GOING TO BE IN SCARCE SUPPLY. I THINK MACHINES ARE GOING TO GET MORE INTELLIGENT, BUT BEFORE WE TALK ABOUT ARTIFICIAL GENERAL INTELLIGENCE, WHICH LET'S – I DON'T WANT TO EVEN GET INTO THE SPECULATION OF WHICH DECADE OR WHICH CENTURY IT WILL BE, THE REALITY IS COMPUTER INTELLIGENCE OR ARTIFICIAL INTELLIGENCE WILL BE INTELLIGENT IN NARROW WAYS, AND HUMANS HAVE A LOT TO CONTRIBUTE IN CONJUNCTION WITH THESE MACHINES BECAUSE OF THE CURIOSITY, EMPATHY --

ISAACSON: WHAT ARE THE COOLEST THINGS Y'ALL ARE DOING AT MICROSOFT NOW IN THE MACHINE LEARNING REALM?

NADELLA: IT STARTS FOR ME WITH CORTANA. EVERY DAY I WAKE UP WHERE CORTANA IS MORE INTELLIGENT. ONE OF THE THINGS I TALK ABOUT IS WITH ALL THE ABUNDANCE WE HAVE OF COMPUTERS AND COMPUTING, WHAT IS SCARCE IS HUMAN ATTENTION AND TIME. AND SO HAVING A PERSONAL DIGITAL ASSISTANT THAT REALLY HELPS ME REGAIN MY TIME, EMPOWERS ME TO GET MORE OUT OF EVERY MOMENT OF MY LIFE IS PERHAPS THE BEST A.I. CAPABILITY I WANT TODAY.

EVANS: SO CAN I ASK YOU, THE BRITISH VOTE TO LEAVE THE EUROPEAN UNION LAST THURSDAY, YOU WAKE UP, WHAT DO YOU DO? WHAT HAVE YOU DONE SINCE? WHAT WILL YOU AS MICROSOFT DO NEXT?

NADELLA: LOOK, I THINK THE WE ARE GLOBAL COMPANY 55% OF OUR REVENUES ARE GLOBAL, SO WHAT HAPPENS IN BRITAIN AND WHAT HAPPENS IN THE GLOBE AND THE WORLD MATTERS A LOT TO US IN OUR CORE BUSINESS. IT'S NOT THE ONE INCIDENT HERE. I THINK BRITAIN IS A HUGE MARKET FOR -- UNITED KINGDOM IS HUGE MARKET FOR US, 7, 8% OF OUR REVENUE, THE REAL THING IS HOW DO WE BRING BACK CERTAINTY THAT GLOBAL COMPANIES AND GLOBAL ECONOMIES CAN THRIVE IN A CONNECTED WORLD.

EVANS: SO IT DOESN'T MEAN NECESSARILY YOU'RE GOING TO BE MOVING PEOPLE OUT OF THE UK. IS IT GOING TO CHANGE, YOU KNOW, INVESTMENT DECISIONS ABOUT WHETHER IT'S GOING TO BE THE UK OR EUROPE OR HERE IN THE U.S., THOSE KINDS OF THINGS?

NADELLA: WHEN IT COMES TO THE UK WE'VE BEEN THERE FOR 30 YEARS AND WE'RE GOING TO CONTINUE TO INVEST BECAUSE IT'S A HUGE MARKET IN A PLACE WHICH IS PRETTY CORE TO US. BUT AT THE SAME TIME, I THINK, WHAT I AM SEEKING AT LEAST FROM ALL OF US COLLECTIVELY AS A GLOBAL COMMUNITY IS TO MAKE A BETTER CASE FOR WHY A CONNECTED GLOBE, A GLOBE THAT TRADES WITH EACH OTHER, CREATES MORE PROSPERITY LOCALLY BECAUSE I THINK THAT'S SUPER IMPORTANT NOT JUST FOR BUSINESS BUT IT'S IMPORTANT FOR US AS A SOCIETY.

EVANS: THAT'S BEEN A HUGE THEME, WALTER, OUT HERE, HOW DO YOU MAKE THAT CASE? CAN YOU STILL MAKE THAT CASE?

ISAACSON: WELL ESPECIALLY WHEN IT IS SO MANY PEOPLE WHETHER IT'S A SHIPYARD WORKER OR THE MAYTAG FORMER PLANT WORKER IN NEWTON, IOWA, FEELS THAT, WELL, TRADE MAY BENEFIT A CERTAIN ELITE IN THIS WORLD. AND CERTAINLY IMMIGRATION. MAYBE SOMETHING THAT SOME PEOPLE REALLY LIKE. BUT MY JOB IS GONE AND MAYBE MY, YOU KNOW, FLAT SCREEN COMPUTER, YOU KNOW, THE NEW WINDOWS IS A LITTLE BIT CHEAPER. BUT -- AND I CAN BUY IT ON SUNDAY, BUT ON MONDAY I CAN'T GET ON THE BUS AND GO TO WORK AND SECURE A JOB. I DON'T THINK THAT'S A NATURAL OR AN INEVITABLE OUTGROWTH OF EITHER IMMIGRATION OR TRADE OR TECHNOLOGY, IT'S AN OUTGROWTH OF POLICIES, JUST LIKE WHEN WE'RE TALKING ABOUT ARTIFICIAL INTELLIGENCE, WE'RE IN CHARGE OF DECIDING HOW IT'S GOING TO WORK. WELL, WE'RE IN CHARGE OF THE POLICIES. AND THE POLICIES HAVE LEFT A LOT OF PEOPLE BEHIND.

EVANS: I WANT TO ASK YOU, TOO SATYA, BEFORE WE HAVE TO LET YOU GO, ABOUT THE LINKEDIN DEAL. I MEAN IT TOUCHES ON A LOT OF DIFFERENT ASPECTS THERE'S DATA, THERE'S INTERCONNECTIVITY IN THOSE KIND OF THINGS. IS THERE GOING TO BE MORE TO COME IN YOUR PIPELINE OF DEALS, IN THE LINKEDIN VEIN? ARE THERE GOING TO BE MORE DEALS IN A DIFFERENT KIND OF VEIN? OR YOU FOCUSED ON DEVELOPING INTERNALLY NOW?

NADELLA: OUR CORE IS ALWAYS GOING TO BE OUR ORGANIC INNOVATION THAT WE CREATE. TO ME EVERYTHING COMES BACK TO OUR SENSE OF PURPOSE AND MISSION. I TALK ABOUT OUR MISSION BEING EMPOWERING PEOPLE AND ORGANIZATIONS ALL OVER THE PLANET TO ACHIEVE MORE THROUGH DIGITAL PLATFORMS AND TOOLS AND IN THAT CONTEXT, LINKEDIN WAS AN AMAZING DEAL FOR US TO DO, BECAUSE OF THEIR MISSION. THEIR MISSION TO CONNECT THE WORLD'S PROFESSIONALS, TO MAKE THEM MORE SUCCESSFUL AND PRODUCTIVE. YOU COULDN'T HAVE FOUND TWO MORE COMPATIBLE MISSIONS, BECAUSE EVERY DAY WHEN YOU THINK ABOUT MICROSOFT, IT'S ABOUT THE TOOLS THAT PROFESSIONALS USE TO CREATE, TO MAKE, AND NOW HAVING THE PROFESSIONAL NETWORK WITH THEM, AS THEY CREATE AND MAKE, I THINK, CAN BE GAME CHANGING. AND THAT'S REALLY WHAT LED US TO LINKEDIN AND WE WILL STAY VERY, VERY FOCUSED ON THINGS WE UNIQUELY CAN CONTRIBUTE TO THIS WORLD.

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