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First on CNBC: CNBC Transcript: Microsoft CEO Satya Nadella Speaks with CNBC’s Jon Fortt on “Squawk Alley” Today

WHEN: Today, Tuesday, September 26, 2017

WHERE: CNBC's "Squawk Alley"

Following is the unofficial transcript of a FIRST ON CNBC interview with Microsoft CEO Satya Nadella on CNBC's "Squawk Alley" (M-F 11am – 12pm ET) today, Tuesday, September 26, 2017. Following is a link to the interview on CNBC.com: https://www.cnbc.com/video/2017/09/26/theres-a-dark-side-to-every-new-technology-ceo-of-microsoft.html.

All references must be sourced to CNBC.

SARA EISEN: WITH THAT, JON FORTT AT THE NASDAQ WITH A SPECIAL GUEST. JON.

JON FORTT: THANK YOU, SARA. I'M HERE WITH SATYA NADELLA, CEO OF MICROSOFT AND THE AUTHOR OF "HIT REFRESH: THE QUEST TO REDISCOVER MICROSOFT'S SOUL AND IMAGINE A BETTER FUTURE FOR EVERYONE." THIS IS ABOUT CULTURAL CHANGE, THE FUTURE, A LITTLE OF YOUR PERSONAL BACKGROUND. SO, HITTING REFRESH ON MICROSOFT. YOU HIT REFRESH. HAS THE NEW ELEMENT ON THE PAGE LOADED YET OR ARE WE STILL WAITING?

NADELLA: YOU KNOW, TO ME, ONE OF THE THINGS THAT BILL WRITES IN THE FORWARD I THINK CAPTURES –

FORTT: BILL GATES.

NADELLA RIGHT – BILL GATES - CAPTURES THE SENSE OF HIT REFRESH AND THE LOGIC BEHIND IT, WHICH IS YOU'VE GOT TO BE SMART SO THAT THE PAGE LOAD TIMES FAST THAT MEANS, YOU DON'T WANT TO CHANGE EVERYTHING. YOU WANT TO CHANGE THE THINGS THAT MATTER THE MOST TO BE ABLE TO REALLY GO AFTER THE NEW CONCEPTS. CULTURE AND CULTURE CHANGE IS IN SUPPORT OF, IN OUR CASE, INNOVATION. AND IN TECH THERE'S NO SUCH THING AS A CONSTANT, SO THE IDEA THAT YOU HAVE TO COME UP WITH NEW CONCEPTS, WHICH NEED NEW CAPABILITY, IS WHAT CULTURE ENABLES. SO CULTURE ON ITS OWN IS NOT JUST AN AGENDA, BUT CULTURE COUPLED WITH NEW INNOVATION IS WHAT REALLY OUR BUSINESS IS ALL ABOUT.

FORTT: A LOT OF PEOPLE ARE GOING TO SAY WHY WRITE A BOOK NOW, WHY WRITE A BOOK NOW? SOME PEOPLE WRITE A BOOK AFTER THEY'VE RETIRED OR AFTER, YOU KNOW, THEY'VE HIT SOME OBVIOUS SUCCESS POINT. YOU SAID THIS IS NOT A MEMOIR, YOU'RE NOT TRYING TO SAY THAT THE GAME IS OVER AND YOU'VE WON. IS THIS KIND OF CULTURAL TOUCHSTONE MOMENT WHERE YOU'RE TRYING TO DO THIS FOR MICROSOFT'S EMPLOYEES AND PERSPECTIVE EMPLOYEES AND CUSTOMERS SAYING, LOOK, HERE'S WHAT WE'RE TRYING TO DO?

NADELLA: YOU'RE RIGHT. MOST BUSINESS BOOKS ARE WRITTEN LOOKING BACK, EITHER AS GRAND SUCCESSES OR GRAND FAILURES. ONE OF THE THINGS THAT I FELT WAS AS WE ARE GOING THROUGH THIS PROCESS OF TRANSFORMATIVE CHANGE AMONGST TRANSFORMATIVE TECHNOLOGY CHANGE, HOW DO I REFLECT ON THAT PROCESS? THAT'S MORE OF THIS BOOK, AND THIS ENTIRE METAPHOR OF HIT REFRESH IS WE AS INDIVIDUALS ARE DEALING WITH CHANGE ALL THE TIME AND WE'RE HITTING REFRESH. WE LEARN FROM IT. SAME IS TRUE FOR ORGANIZATIONS. AND SAME IS TRUE FOR OUR SOCIETY. SO WHILE IN THE MIDST OF IT, SO TO SPEAK, IN THE FOG OF WAR, ONE OF THE REFLECTIONS, AND THIS IS CLEARLY NOT SOME DESTINATION THAT HAS BEEN REACHED, BUT IT'S MORE A PROCESS OF CONTINUOUS RENEWAL.

FORTT: ONE OF THE CHALLENGES THAT YOU TALK ABOUT IN THE BOOK IS PRIVACY VERSUS SECURITY. WE'VE JUST HAD THE CEO OF EQUIFAX RESIGN IN THE WAKE OF THAT HUGE DATA BREACH. 143 MILLION ACCOUNTS COMPROMISED. MAYBE NOT ON PAPER THE WORST PRIVACY BREACH EVER, BUT I WOULD ARGUE IT IS THE WORST IN TERMS OF THE IMPACTS ON CONSUMERS. IS MICROSOFT PAYING ENOUGH ATTENTION TO TECHNOLOGY'S POTENTIAL DARKSIDE, EVEN AS YOU LOOK AHEAD TO ARTIFICIAL INTELLIGENCE AND SOME OF THESE OTHER TECHNOLOGIES, TO PREVENT THE EQUIVALENT OF AN EQUIFAX HAPPENING TEN YEARS DOWN THE LINE IN THE A.I. ERA?

NADELLA: IT'S A VERY IMPORTANT QUESTION. THERE'S NO DOUBT THAT AS EVERY PART OF OUR LIFE AND EVERY PART OF OUR ECONOMY INCREASINGLY IS DRIVEN BY SOFTWARE AND IS BECOMING DIGITAL, CYBERSECURITY IS TOP OF MIND. IN FACT, IF I LOOK BACK, WITH ANY NEW TECHNOLOGY THERE'S ALWAYS GOING TO BE THE DARK SIDE AFTER ALL, WITH THE TELEGRAPH THERE WAS WIRE FRAUD. WE HAD TO COME UP WITH BOTH THE LAWS, AS WELL AS TECHNOLOGY TO DEAL WITH IT. I THINK THE SAME IS GOING TO BE TRUE, WHETHER IT'S WITH A.I. OR CYBERSECURITY. TO ME AND MICROSOFT, ONE OF THE THING THAT IS WE HAVE TO REALLY STEP UP TO, AND THIS IS SOMETHING EVEN WE STARTED 15 YEARS AGO, IS THE CORE SECURITY OF OUR PRODUCTS HAS GOT TO BE A TOP PRIORITY. WE ARE, AFTER ALL, THE FIRST RESPONDERS, AND SO THEREFORE, REALLY BEING ON TOP OF OUR GAME ON A CONTINUOUS BASIS.

FORTT: BECAUSE IT'S OFTEN SAID OF THE INTERNET, WASNT BUILT FOR SECURITY, RIGHT, IF IT HAD BEEN BUILT INHERENTLY SECURE, THAT WOULD BE BETTER. IS MACHINE LEARNING AND A.I. THE CONSTRUCTS YOURE BUILDING, ARE THEY BEING BUILT WITH SECURITY AND THE POTENTIAL DARK SIDE IN MIND?

NADELLA: THAT'S A GREAT POINT, BECAUSE ONE OF THE THINGS WE SOMETIMES THINK IS SECURITY IS SOMETHING THAT CAN BE COMPLETELY BUILT IN. CLEARLY, THERE IS A WAY FOR US TO SECURE THE PROTOCOLS, THE DATA, AND SO ON. BUT ONE OF THE THINGS THAT IS SO IMPORTANT FOR EVERYONE TO REALIZE IS THAT OPERATIONAL SECURITY POSTURE THAT ALL OF US HAVE. IT'S KIND OF LIKE IF SOMEBODY SAID THIS TO ME, YOU CAN'T GET FIT BY LOOKING AT OTHERS GO TO THE GYM. YOU HAVE TO GO TO THE GYM.

FORTT: WHAT'S THAT MEAN IN THE TECHNOLOGY SENSE?

NADELLA: THAT MEANS IN SOME SENSE YOU HAVE TO REALLY SAY WHAT'S THE DIGITAL ESTATE? WHAT ARE THE INTRUSIONS? WHAT ARE THE ATTACKS? AM I ABLE TO DETECT THEM FAST ENOUGH? AM I ABLE TO REMEDIATE FAST ENOUGH? SO THE OPERATIONAL SECURITY POSTURE IS AS IMPORTANT AS QUOTE, UNQUOTE, THE LOCKS ON YOUR FRONT DOOR. ARE YOU WATCHING, AND IN SOME SENSE IT'S AN INTELLIGENCE GAME. I'LL GIVE YOU AN EXAMPLE AT MICROSOFT, FOR EXAMPLE, USING ONE OF OUR CLOUD SERVICES. THE FACT WE SEE A BILLION PLUS END POINTS AND WHAT'S HAPPENING AT THEM IN REAL TIME, WE USE THE INTELLIGENCE FROM THAT TO SECURE OUR CLOUD. ANYONE USING OFFICE 365 WON'T GET THE MALICIOUS THINGS THAT MAY BE PROPAGATING IN E-MAIL BECAUSE OF OUR ABILITY TO TAKE DATA FROM ONE PLACE AND SECURE IT FROM EVERYONE ELSE.

FORTT: WHAT ABOUT BUSINESSES LIKE EQUIFAX, IF THEY HAD BEEN ON YOUR CLOUD WOULD YOU HAVE HAD ANY KIND OF EARLY WARNING SYSTEM THAT WOULD HAVE ALERTED THEM THAT THIS VULNERABILITY WAS BEING EXPLOITED, AND THEY WERE LOSING DATA?

NADELLA: I CAN'T SPEAK TO THE SPECIFICS OF EQUIFAX AND THEIR STATE, BUT OVERALL, I THINK, THE MORE WE HAVE THE ABILITY TO TAKE DATA THAT WE SEE ACROSS OUR DIGITAL ESTATES AND ALL THE GOOD GUYS SHARE THAT DATA, THE BETTER OFF WE WILL BE IN KEEPING ANYONE WHO IS TRYING TO ATTACK, AND THAT, I THINK, IS SOMETHING THAT I AM A PROPONENT OF AT THE INDUSTRY LEVEL.

FORTT: IT'S BEEN ABOUT TEN MONTHS SINCE THE LINKEDIN ACQUISITION OFFICIALLY CLOSED, I BELIEVE, $26 BILLION, BIG BUY. HOW LONG BEFORE WE SEE – WE LOOK ADD LINKEDIN AND SEE OFFICE 365 COMPLETELY BAKED IN, WE LOOK AT OFFICE, WE SEE LINKEDIN. AND THERE'S MORE OF THAT MIXING OF THE TWO PLATFORMS.

NADELLA: YEAH, IN FACT, FIRST THING THAT I WANT US TO SORT OF MAKE SURE WE MEASURE OURSELVES AND THE STREET SHOULD MEASURE US IS WHAT'S HAPPENING TO LINKEDIN'S ORGANIC GROWTH? WE ARE VERY PLEASED WITH HOW LINKEDIN POST-ACQUISITION IS CONTINUING TO ACCELERATE AND THAT'S THE FIRST SIGN OF A VERY HEALTHY FRANCHISE. THEN THERE ARE TWO OBVIOUS AREAS THAT WE CAN REALLY SEE THE INTEGRATIONS. ONE, IN FACT, WE LAUNCHED JUST YESTERDAY WAS THE OFFICE 365 AND LINKEDIN COMING TOGETHER TO HELP PROFESSIONALS WHO USE BOTH THOSE PRODUCTS. IN FACT, YOU COULD HAVE GONE TO A CONFERENCE, USED THE LINKEDIN APP TO FIND THE OTHER PEOPLE AT THE CONFERENCE AND THEN NETWORK WITH THEM. THAT IS SORT OF A COOL THING. AND IN OUTLOOK YOU CAN FIND NOW YOUR LINKEDIN CONTACTS. SOMEBODY SENDS YOU MAIL, YOU'LL FIND THEM THERE, SEE THE FILES YOU EXCHANGED, SO THAT'S FANTASTIC TO SEE BUT ANOTHER AREA WHERE IT'S REALLY A GAME CHANGER IS FOR US IN THE DYNAMICS AREA WE NOW HAVE SOLUTIONS, WHICH BRING TOGETHER THE LINKEDIN SALES NAVIGATOR WITH CRM, OUR DYNAMICS 365 CRM, AND THAT'S A GAME CHANGER FOR ANYBODY IN THE B 2 B SIDE OF IT. SO WE'RE EXCITED ABOUT THE APPLICATIONS SIDE AND OFFICE 365.

FORTT: IN THE BOOK YOU TALK ABOUT YOUR OWN EXPERIENCE COMING TO THE U.S. AS A 21 YEAR OLD, BEING ON THIS COLLEGE CAMPUS, AND THEN GOING TO WORK FOR MICROSOFT. AND IN IT YOU TALK ALSO ABOUT HOW YOU TRANSITIONED FROM BEING THIS LONE WORKER TO GETTING MARRIED AND BEING A FAMILY MAN, AND YOU HAD A GREEN CARD THIS I DIDN'T REALIZE ABOUT YOU, IM GOING TO READ JUST A PORTION FROM IT. YOU HAD A GREEN CARD AND YOU SAY YOU'RE LOOKING TO GET MARRIED TO YOUR WIFE. "THE H1B ENABLES SPOUSES TO COME TO THE UNITED STATES WHILE THEIR HUSBANDS AND WIVES ARE WORKING HERE, SUCH IS THE PERVERSE IMMIGRATION LAW, THERE'S NOTHING I COULD DO ABOUT IT. ANU, MY WIFE TO BE, WAS MY TOP PRIORITY AND THAT MADE MY DECISION A SIMPLE ONE. I WENT BACK TO THE U.S. EMBASSY IN DELHI IN JUNE OF 1994, PASSED THE ENORMOUS LINES OF PEOPLE HOPING TO GET A VISA AND TOLD THE CLERK I WANTED TO GIVE BACK MY GREEN CARD AND APPLY FOR AN H1B. HE WAS DUMBFOUNDED." YOU GAVE UP YOUR GREEN CARD, BECAUSE U.S. IMMIGRATION LAW AT THE TIME SAID YOUR WIFE WOULD PROBABLY HAVE TO WAIT FIVE YEARS AT LEAST TO COME OVER. HOW DOES THAT INFORM THE WAY YOU AS THE CEO OF MICROSOFT LOOK AT THIS IMMIGRATION DEBATE THAT'S HAPPENING IN OUR COUNTRY RIGHT NOW?

NADELLA: THE FIRST THING I'LL SAY, JOHN, IM THE PRODUCT OF TWO AMAZING, UNIQUE AMERICAN THINGS. AMERICAN TECHNOLOGY THAT REACHED ME WHERE I WAS GROWING UP, HELPED ME DREAM THE DREAM, AND THEN THE ENLIGHTENED AMERICAN IMMIGRATION POLICY THAT LET ME COME HERE AND LIVE THE DREAM. SO WHEN I THINK ABOUT IT, ONLY IN AMERICA WOULD A STORY LIKE MINE BE EVEN POSSIBLE. SO BEFORE WE ARE CRITICAL ABOUT OUR IMMIGRATION POLICY, THE FACT THAT THE U.S. IS THE BEACON OF HOPE AND THE ATTRACTER OF TALENT FROM ALL OVER THE WORLD IS SOMETHING WE SHOULD HOLD AS PRECIOUS THAT'S WHERE THE CRITICISM COMES FROM, NOT IN TERMS OF ANYTHING ELSE HAVING SAID THAT, I THINK, WE CAN'T HAVE AN IMMIGRATION POLICY THAT IS ENLIGHTENED FOR OUR OWN COMPETITIVENESS. IT'S NOT ABOUT DOING THIS OUT OF ANYTHING ELSE OTHER THAN TO SAY LET US BE THE PLACE WHICH ATTRACTS THE BEST TALENT SO THAT BEST TALENT CAN CONTRIBUTE TO OUR ECONOMY. BUT IT'S NOT JUST ABOUT SKILLED IMMIGRATION. WE ALSO NEED TO STAND UP FOR BEING THE LAST PLACE OF HOPE FOR MOST PEOPLE -- FOR PEOPLE WHO NEED IT THE MOST. THAT'S WHAT, AGAIN, DRIVES AMERICAS UNIQUENESS AND WE SHOULD NEVER, NEVER GIVE IT UP.

FORTT: MICROSOFT'S IMMIGRATION LAWYER AT MICROSOFT WAS ONE WHO SUGGESTED TO YOU THAT MAYBE YOU NEEDED TO SHIFT FROM A GREEN CARD TO AN H1B TO DO THAT. NOT EVERYBODY HAS THAT KIND OF EXPERT ADVICE IN PLACE, AND SOME WOULD ARGUE OUR IMMIGRATION SYSTEM HASN'T BEEN ENLIGHTENED FOR A LONG TIME, IF EVER HOW DO WE GET THERE? HOW DOES MICROSOFT HELP US GET THERE?

NADELLA: I THINK A COMPREHENSIVE IMMIGRATION REFORM THAT, AGAIN, SPEAKS TO OUR INTERESTS AS A NATION, MAKES US STRONGER, WHAT MAKES US MORE COMPETITIVE, I THINK, IS MUCH NEEDED. SOME OF THINGS, THE IDEA YOU HAVE TO GIVE UP YOUR GREEN CARD TO GET AN H1B IS IN RETROSPECT SILLY. LET US TAKE THE REFORM AND SO THAT IT WORKS FOR US, BOTH OUR SECURITY, BUT AS WELL AS OUR COMPETITIVENESS.

FORTT: LET'S SAY YOU'RE LEADING A GREAT POWER WITH A PROUD LEGACY OF DOMINANCE, BUT YOU SEE THAT TRUST IS BREAKING DOWN IN THE CULTURE AND THE INFIGHTING IS KEEPING MEANINGFUL WORK FROM GETTING DONE. COULD BE TALKING ABOUT MICROSOFT, COULD BE TALKING ABOUT THE UNITED STATES RIGHT NOW UNDER PRESIDENT TRUMP. CAN AMERICA HIT REFRESH? HOW?

NADELLA: I THINK AMERICA AND WHAT IT HAS DONE IN THE 200-PLUS YEARS IS A SOCIETY THAT HAS HIT REFRESH CONSTANTLY. IF ANYTHING, WE CAN LEARN FROM OUR OWN HISTORY IS OUR ABILITY TO DEAL WITH CHANGE AND REALLY COME UP WITH THE CHANGE THAT IS NEEDED BROAD SPECTRUM. NOT ONLY CHANGE THAT IS NEEDED IN TECHNOLOGY, BUT CHANGE THAT IS NEEDED IN SOCIETY, SO THAT WE CAN BE THE COUNTRY THAT, IN FACT, CREATES THE MOST NEW INNOVATION, CREATES THE MOST NEW OPPORTUNITY. ONE OF THE THINGS I ADMIRE THE MOST ABOUT OUR COUNTRY IS NO OTHER SOCIETY IN HUMAN HISTORY HAS CREATED SO MUCH OPPORTUNITY FOR SO MANY PEOPLE. WE CALL THIS BLUE COLLAR ARISTOCRACY. IT DIDN'T EXIST IN HUMAN HISTORY UNTIL IT WAS FOUND IT THE UNITED STATES. THAT'S SOMETHING THAT IS PRECIOUS AND ONLY HAPPENED BECAUSE WE WERE ABLE TO HIT REFRESH.

FORTT: MICROSOFT IS A SPONSOR OF THE NFL. YOUR SURFACE TABLETS AND COMPUTERS ARE ALL AROUND THE FIELD BEING USED MORE AND MORE.

YOU ARE -- YOU WERE ALSO ON THE PRESIDENT'S TECH COMMITTEE UNTIL ALL OF THOSE WERE DISOLVED. THERE'S A BIG CONTROVERSY THIS WEEK INVOLVING THE PRESIDENT AND THE NFL. WHAT WOULD YOU SAY TO HIM IF YOU STILL HAD THAT SEAT AT THE TABLE?

NADELLA: YOU KNOW, FOR ME, I THINK RESPECTING ALL POINTS OF VIEW. IN THIS CASE, THE PLAYERS, THE FANS, AND MAKING SURE WE'RE DOING EVERYTHING POSSIBLE TO BRING ABOUT MORE COHESION. UNDERSTANDING WHERE THE OTHER PERSON IS COMING FROM, I THINK, IS THE NEED OF THE HOUR IN ALL OF US. SO THE MORE WE CAN HAVE A RICH DIALOGUE, IT DOESN'T MEAN WE HAVE TO AGREE ON EVERYTHING ALL THE TIME, BUT LET'S HAVE A RICH DIALOGUE, LET'S HAVE THAT EMPATHY FOR THE OTHER PERSON'S POINT OF VIEW, LET US RESPECT THE POINT OF VIEW OF OTHER PEOPLE. THAT IS, I THINK, WHAT HAS MADE AMERICA WHAT IT IS TODAY AND LET US MAKE SURE WE DON'T TRADE THAT OFF.

FORTT: AS YOU LOOK AT WHAT SURFACE HAS DONE WITH THIS NFL RELATIONSHIP, HAS IT WORKED? IS THE NFL EFFECTIVE IN ITS PLATFORM FOR A TECHNOLOGY COMPANY, AND IS IT BECOMING MORE EFFECTIVE OR LESS SO?

NADELLA: LOOK, YOU KNOW, FOR ME I LEARNED FOOTBALL WHEN I TURNED 21 AND CAME TO THE UNITED STATES.

FORTT: CRICKET BEFORE THAT.

NADELLA: IT WAS CRICKET BEFORE THAT. IT'S AN AMAZING SPORT, IT'S AN AMAZING BRAND, AND FOR SURE OUR ASSOCIATION WITH SURFACE AND XBOX AND MANY OTHER TECHNOLOGES WITH THE NFL HAS BEEN FANTASTIC. AND IT'S SOMETHING THAT WE VALUE A LOT AND I KNOW THE NFL VALUES A LOT. WE'VE EVEN LEARNED A LOT, WHAT DOES IT MEAN TO BUILD TECHNOLOGY THAT CAN WITHSTAND THE SIDELINES OF THE NFL, SO WE'RE PROUD TO BE ASSOCIATED WITH IT.

FORTT: I WANT TO ASK FINALLY ABOUT ARTIFICIAL INTELLIGENCE. YOU'VE GOT THIS A.I. AND RESEARCH AND DEVELOPMENT GROUP THAT'S GROWN FROM 5,000 PEOPLE TO 8,000 PEOPLE JUST IN THE PAST YEAR. IT'S NOW MORE THAN 5% OF MICROSOFTS HEAD COUNT. HOW DO YOU DO THAT AND LOOK TO THE FUTURE WITHOUT FALLING INTO THAT OLD XEROX PARK TRAP OF HAVING ALL THESE RESEARCHERS IN A GROUP AND NOT BEING ABLE TO GET INNOVATIVE PRODUCTS OUT THE DOOR?

NADELLA: IT'S A GREAT QUESTION, JOHN. IN SOME SENSE THAT'S THE EXISTENTIAL QUESTION FOR US. 43 YEARS AFTER OUR FORMATION, ONE OF THE THINGS WE REALIZED IS WHATEVER NOVEL NEW CONCEPT YOU'VE COME UP WITH, ULTIMATELY, WILL STOP BEING NOVEL. YOU WILL NEED TO COME UP WITH THE NEXT THING IN ORDER TO COME UP WITH THE NEXT THING, YOU HAVE TO PERHAPS BUILD NEW CAPABILITY LIKE A.I. IS SOMETHING WE'VE ALWAYS HAD, BUT WE ARE, IN FACT, HAVE TO BE BUILDING NEW TYPES OF A.I. AND TO DO THAT YOU NEED A CULTURE THAT FOSTERS THAT CAPABILITY BUILDING LONG BEFORE, QUITE FRANKLY, EVEN THE NEW CONCEPT IS CLEAR SO ONE OF THE GREAT BENEFITS IS THE LONG-TERM APPROACH MICROSOFT HAS TAKEN TOWARDS A.I. IT WAS IN 1995 WHEN BILL SAID, YOU KNOW, THE SPEECH RECOGNITION THING IS GOING TO BE IMPORTANT. LET'S GET STARTED. RIGHT, WE DIDN'T TURN AROUND JUST YESTERDAY TO START WORKING ON SPEECH SYNTHESIS OR SPEECH RECOGNITION. THAT ABILITY TO TAKE A LONG-TERM APPROACH, BUT THEN SEIZING THESE MARKET OPPORTUNITIES WHEN THEY ARRIVE, AND IT'S NOT THAT YOU PERFECTLY TIMED THEM, BECAUSE YOU CAN'T, BUT YOU'VE GOT TO BE ABLE TO BUILD CAPABILITY AND HAVE A CULTURE THAT ALLOWS YOU TO BUILD THE CAPABILITIES SO SEIZE THESE OPPORTUNITIES.

FORTT: AND THE PARTNERSHIPS YOU'VE BEEN DOING LATELY, CORTANA, MICROSOFTS SPEECH AGENT, TALKING TO ALEXA WITH JEFF BEZOS AT AMAZON, ISNT THAT RISKY?

NADELLA: LOOK, ALL PARTNERSHIPS CAN BE VIEWED AS -- ALL RELATIONSHIPS CAN BE VIEWED AS ZERO SUM OR MARKET EXPANSIVE. ONE OF THE FIRST THINGS THAT AT LEAST I LOOK AT IS WHAT CAN WE DO WERE IN SUCH EARLY DAYS OF THESE VOICE-FIRST DEVICES? THERE ARE PROBABLY, WHAT, 5, 10 MILLION DEVICES, SO IT'S JUST MINUSCULE. I THINK WHAT IS MOST IMPORTANT FOR US IS START MAKING IT A DAILY HABIT. THIS AMBIENT COMPUTING, I THINK, IS GOING TO BE BIG. AND MORE IMPORTANTLY, THE STRENGTH THAT WE HAVE IS AROUND PRODUCTIVITY AND COMMUNICATIONS AND THINGS THAT PROFESSIONALS NEED, EVEN IN A VOICE-FIRST WORLD. JUST LIKE HOW WE TOOK OUR OFFICE 365 APPS AND PUT IT ON IOS AND ANDROID, WE WANT TO MAKE SURE OUR VOICE-FIRST APPLICATIONS ARE AVAILABLE ON ALL PLATFORMS, SO THAT'S THE FUNDAMENTAL CONSTRUCT BEHIND IT.

FORTT: YEAH, HOPEFULLY THOSE TWO A.I. KIDS WILL BE GOOD INFLUENCES ON EACH OTHER AND WON'T GET INTO TOO MUCH TROUBLE. SATYA NADELLA, CEO OF MICROSOFT, AUTHOR OF "HIT REFRESH," THANKS SO MUCH FOR JOINING US

NADELLA: THANKS SO MUCH FOR HAVING ME.

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