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The video tutorial from Cohere AI discusses word and sentence embeddings, which are essential components of large language models. These embeddings allow computers to process language by converting words into numerical representations. Each word is associated with a list of numbers, and similarly, sentences are represented in a meaningful numerical format. This process is not done manually; instead, a neural network analyzes context to bring words and sentences closer together based on their usage. As a result, this approach leads to impressive outcomes in language understanding and processing by machines.