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The video tutorial from Cohere AI discusses word and sentence embeddings, which are essential components of large language models. These embeddings allow computers to understand and process language by converting words and sentences into numerical representations. Each word is associated with a list of numbers, while sentences are similarly represented in a meaningful way. This process is not human-driven; instead, it relies on complex neural networks that analyze contextual relationships between words. As words appear together in the same context, the model brings their numerical representations closer together, ultimately yielding impressive results in language understanding.