Updated below: As we have been covering for a while now, the talent agencies here have exploring and raising funds to become de facto venture capital firms themselves, mainly to invest in digital entertainment in the Southern California region. Now William Morris Agency is first off the gates: it is launching a fund along with Silicon Valley VC firms Accel Partners and Venrock, and has an unusual limited partner in the form of AT&T (NYSE: T), reports NYT.

Richard Wolpert, the former president of Disney (NYSE: DIS) Online and the chief strategy officer at RealNetworks (NSDQ: RNWK), is heading the fund...he has been working with Accel as a venture advisor for at least a year now. The fund’s size is in tens of millions of dollars, and the funding will mainly be in seed rounds in digital media companies, though they will look at larger investments if needed. Also, though the geographic focus is here in SoCal, they could consider other areas as well.

For the VC firms, it is about bridging the tech vs entertainment divide. David Siminoff, GP at Venrock, said, helpfully “The ethos of this fund is about reducing the friction...Hollywood people are not stupid. They are just not technology people.” Thanks guys.

Meanwhile, Susan Johnson, the SVP for business development at AT&T, will be working with the alliance on AT&T’s behalf. It is hoping to invest mobile content and mobile advertising technologies. The company has invested in film financing firm Media Rights Capital before (along with WPP), but that has been more passive.

As for the CAA’s $150 million fund that we reported on first here, we have heard things might have slowed down a bit as the economy slows down.

Updated: I spoke briefly this morning to Wolpert, on his views on this fund. He said that how this fund differentiates it from what other talent agencies are trying to do is WMA knows what it is good at: getting an early look at a lot of business plans and new ideas. From then on, it has brought in veterans in the VC game (with Accel and Venrock), and then someone like him, who can do the actual investing. Also, this is an early stage seed fund with a maximum of $1 million at most, not a series A or B round type of VC fund. It is all about getting in very early in the game. Also AT&T is a client of WMA, and the company would like a window in early stage companies..particularly as it related to digital media advertising and sponsorships, since that is a big focus of the company going forward, both on the mobile and wireless side. He didn’t rule out adding another strategic limited partner into the fund in the future, but for now AT&T is it.