In the bowl of a stand mixer fitted with a whisk attachment or with a medium bowl and a handheld mixer, whip the butter on high speed for 7 to 8 minutes, until very pale and fluffy.

Lower the speed to low and gradually whisk in the powdered sugar until it is incorporated.

Add the vanilla extract and 2 tablespoons of milk or cream. If the frosting is too thick, add an additional tablespoon of milk or cream.

Fold in the rainbow sprinkles until evenly mixed.

Use immediately or store in an airtight container at room temperature for up to 2 days.

For longer storage, refrigerate for up to 2 weeks or freeze for up to 2 months. Bring up to room temperature on the counter (2 hours if refrigerated, overnight if frozen) and re-whisk briefly before using.