AI language models are a key component of natural language processing (NLP), a field of artificial intelligence (AI) focused on enabling computers to understand and generate human language. Language models and other NLP approaches involve developing algorithms and models that can process, analyse and generate natural language text or speech trained on vast amounts of data using techniques ranging from rule-based approaches to statistical models and deep learning. The application of language models is diverse and includes text completion, language translation, chatbots, virtual assistants and speech recognition. This report offers an overview of the AI language model and NLP landscape with current and emerging policy responses from around the world. It explores the basic building blocks of language models from a technical perspective using the OECD Framework for the Classification of AI Systems. The report also presents policy considerations through the lens of the OECD AI Principles.