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The video tutorial from Cohere AI discusses word and sentence embeddings, which are essential for large language models. These embeddings transform words and sentences into numerical representations, allowing computers to understand and process language. While humans do not manually associate words with numbers, a neural network performs this task by analyzing context; words that frequently appear together in similar situations are represented with similar numerical values. This method also applies to sentences, resulting in effective and meaningful embeddings that enhance language understanding in AI systems.