In a large mixing bowl, whisk together the sifted flour and sugar until well combined. In a separate bowl, stir the melted butter, eggs, milk, and vanilla extract until smooth and slightly frothy.
Pour the wet ingredients into the dry ingredients and gently fold with a spatula until just combined—turns into a smooth, slightly thick batter. Fold in the rainbow sprinkles evenly, being careful not to overmix.
Grease the small loaf pan or baking dish lightly to prevent sticking. Pour the batter into the prepared pan, spreading it into an even layer with the spatula.
Place the filled pan into the air fryer basket. Set the air fryer to 330°F (165°C) and cook for about 15 minutes, or until the top is golden and a toothpick inserted into the center comes out clean.
Once baking time is complete, carefully remove the pan from the air fryer and let it cool for a few minutes. The cake should have a slight crisp on the outside and be moist inside when pressed gently.
Slice into portions to reveal the fluffy interior with colorful sprinkles randomly distributed throughout. Serve as is or with a dusting of powdered sugar or a drizzle of glaze.
