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The video from Cohere AI discusses word and sentence embeddings, which are essential for large language models. Language models aim to enable computers to understand and process human language, which consists of words, while computers only process numbers. Word embeddings convert words into numerical representations, associating each word with a list of numbers, while sentence embeddings do the same for sentences. This process is not performed by humans; instead, it is executed by a neural network that analyzes context. Words or sentences appearing in similar contexts are assigned closer numerical values. Ultimately, this approach yields impressive results in language processing.