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The video tutorial from Cohere AI discusses word and sentence embeddings, which are fundamental to large language models. These embeddings enable computers to understand and process language by converting words into numerical representations. Each word is associated with a list of numbers, while sentence embeddings similarly represent sentences. This conversion is not done manually; instead, it is performed by complex neural network models that analyze the context in which words appear. As words or sentences appear in similar contexts, their numerical representations are adjusted to be closer together. This process facilitates advanced understanding and processing of language by computers, yielding impressive outcomes.