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The video tutorial from Cohere AI discusses word and sentence embeddings, which are essential for large language models. These embeddings convert words and sentences into numerical representations, allowing computers to process language. While humans do not manually associate words with numbers, a neural network analyzes context to determine the relationships between words and sentences. When two words appear in similar contexts, the model brings their numerical representations closer together. This process yields effective and sophisticated results in understanding and processing language through computational methods.