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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, which is inherently made up of words. Each word and sentence is associated with a list of numbers, determined by a computer using complex models like neural networks. This process involves analyzing context; when two words appear together in the same context, the model adjusts their numerical representations to be closer to one another. The result is a more nuanced understanding of language by the model, leading to impressive outcomes in language processing.