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This video by 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, but since computers operate with numbers, embeddings convert words and sentences into numerical representations. Each word and sentence is associated with a list of numbers that captures their meaning. This process is automated by neural networks that analyze the context in which words appear together, drawing them closer in the numerical space. The video emphasizes that this embedding process is not manually curated but rather learned through complex algorithms, leading to effective language comprehension.