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This video tutorial by Cohere AI discusses word and sentence embeddings, essential components of large language models. Language models aim to help computers understand and process human language, which is inherently composed of words, while computers only work with numbers. Word embeddings convert words into numerical representations, while sentence embeddings do the same for sentences, ensuring the associations make contextual sense. This process is automated by a neural network that analyzes the context in which words and sentences appear together, bringing similar terms closer in their numerical representation. The result is a powerful tool for language understanding in AI.