"We have to start from the core principle that the user is the owner of their data, and the whole economy, not just the tech sector, must get to grips with this," said Nadella who is also one of the co-chairs of the WEF Annual Meeting 2019.
On facial recognition, he said, "I can come up with 10 uses that are virtuous and will improve life, and 10 that would be worrying."
"That's why Microsoft is putting together principles on the fair use of the technology. But self regulation only goes so far. We would welcome regulation that stops it being a race to the bottom," he said.
On General Data Protection Regulation (GDPR), he said, "my own point of view is it's a fantastic start in treating privacy as a human right, I hope that in the United States we do something similar, and that the world converges on a common standard."
On algorithms and machine learning, Nadella said, "as creators of artificial intelligence (AI) we need some principles that govern AI."
At Microsoft, we had to build software that was safe by design. The same now applies to AI, he said.
"The trouble was the "black box". AI is largely data driven today. But new breakthroughs will help us explain the black box so that ethically and in terms of regulation we can control it," he said.
As AI algorithms get smarter, they also become more incomprehensible and humans cannot always understand how a given machine learning algorithm makes decisions. This opaque process is referred as 'black box'.
Nadella further said, "we need a thriving society to have a thriving economy."
"What is technology? Today any team at Microsoft, whether Cloud or Xbox, will have the following composition: designers, data scientists, product managers, software engineers, hardware engineers. Every product requires the social sciences and the STEM sciences to come together to create the modern society."
Asked his predictions for future, Nadella said, "we don't have to have industrial country against country competition...In the future there would be more cooperation, less talk of regions, he predicted.
"If we're sitting here (in 100 years) we'll have more superpowers and I hope that one of the things that we'll have is more capacity for empathy. I hope that's the future as opposed to us being replaced as robots.