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The video tutorial from Cohere AI explains word and sentence embeddings, which are essential for large language models. Language models aim to enable computers to understand and process human language, which is inherently composed of words. Since computers can only process numbers, word embeddings convert words into numerical representations. Similarly, sentence embeddings convert sentences into numbers in a meaningful way. This process is executed by computers, typically using complex neural networks, rather than through human judgment. The models analyze word and sentence context, bringing similar terms closer together in numerical space. This method yields impressive outcomes in language understanding.