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This video tutorial from Cohere AI explains word and sentence embeddings, which are essential for large language models. Since computers process numbers rather than words, word embeddings translate words into numerical representations, associating each word with a list of numbers. Sentence embeddings do the same for sentences. This process is performed by a neural network rather than humans, as the model analyzes the context in which words and sentences appear together. By recognizing patterns in the context, the model brings similar words and sentences closer together in their numerical representation, resulting in effective language understanding.