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This video tutorial from Cohere AI explains word and sentence embeddings, which are essential for large language models. These embeddings allow computers to process language by converting words and sentences into numerical representations. Each word is linked to a list of numbers, with sentence embeddings functioning similarly but at the sentence level. This process is not manually crafted but performed by a computer, typically using a neural network. The model analyzes the context in which words appear together, moving them closer in the numerical space based on their contextual relationships. The result is the ability to achieve impressive outcomes in language understanding and processing.