Rather than resisting data collection, society should double down on it — so long as people are appropriately compensated, technology pioneer Jaron Lanier argued.

"We should think about data as a new way that people provide value. Instead of taking it, we should tell people, 'You're valuable in this new way,'" Lanier said on CNBC's "Squawk Alley."

Amid several cases of high profile breaches and data mismanagement, consumers are increasingly aware of just how much information big technology companies collect from users. It all came to a head in March, after reports that Cambridge Analytica, hired by Donald Trump's campaign, improperly used data of 87 million Facebook users.

Growing fears of unchecked data use have prompted behavioral and policy changes, like Europe's General Data Protection Rule. But Lanier, an interdisciplinary scientist at Microsoft and vocal critic of social media, says rather than locking up data, people should be incentivized to give it away.

"I believe in markets. Taking data and using it to manipulate people is not a real market. Let's admit that data is valuable, pay people for it, motivate them to make it better. Let's get out of the manipulation business," Lanier said.

Lanier also argued that data will become even more important as artificial intelligence technology advances, because "AI needs your data."

"The reason companies need your data is they want to be AI companies," Lanier said.