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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 help computers understand and process human language, which is comprised of words, while computers process numbers. Word embeddings convert words into numerical representations, and sentence embeddings do the same for sentences. This process is automated by a neural network, not by humans. The neural network analyzes context, bringing words that appear together closer in numerical representation. This method yields impressive results, enhancing a computer's ability to comprehend language.