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The video tutorial from Cohere AI discusses word and sentence embeddings, which are essential for large language models. These embeddings are techniques to convert words and sentences into numerical representations, enabling computers to process language. Each word and sentence is assigned a list of numbers based on their contextual relationships, rather than manually created associations. This process is performed by a neural network, which analyzes the context in which two words appear together, bringing their numerical representations closer as they share similar contexts. The final outcome is an effective way for computers to understand and engage with language, producing impressive results.