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The video tutorial from Cohere AI discusses word and sentence embeddings, 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, and similarly, sentences are represented numerically in a meaningful way. This process is not conducted by humans but by complex models, typically neural networks, which analyze the context of words. When two words frequently appear together in similar contexts, their numerical representations are adjusted to be closer in the embedding space, resulting in powerful and effective language processing capabilities.