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This video tutorial by Cohere AI explains word and sentence embeddings, which are fundamental to large language models. Language models aim to enable computers to understand and process language, which is inherently composed of words, while computers operate with numbers. Word embeddings convert words into numerical representations, associating each word with a list of numbers. Similarly, sentence embeddings do this for sentences. This process is not conducted manually but instead through a neural network that analyzes context; if two words frequently occur together, their numerical representations are adjusted to be closer. Ultimately, this results in sophisticated language understanding and processing capabilities.