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This video tutorial from Cohere AI explains the concept of word and sentence embeddings, which are crucial for large language models. Language models aim to enable computers to understand language, but since computers process numbers, embeddings translate words and sentences into numerical representations. Each word and sentence is linked to a list of numbers in a way that captures their contextual relationships. This process is not manually done by humans; instead, it utilizes a neural network that analyzes context. When words or sentences appear together frequently, the model brings their numerical representations closer together, resulting in effective language understanding.