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This video tutorial by Cohere AI discusses word and sentence embeddings, which are essential components of large language models. The primary challenge for these models is enabling computers to understand language, which is inherently composed of words, while computers operate on numerical data. Word embeddings convert words into numerical representations, and sentence embeddings do the same for sentences, creating lists of numbers that maintain the semantic meaning. This process is conducted by neural networks rather than humans, as the models analyze context to position words and sentences similarly when they appear together. This method yields impressive outcomes in language understanding and processing.