In a stand mixer, combine lukewarm water and yeast. Let it sit until dissolve and froth for about 5 minutes.
Meanwhile, in a microwave-safe medium bowl, heat milk for about 2 minutes. Remove and let it cool to about 105℉/40℃.
Add milk, sugar, salt, eggs, butter, and 1 cup of flour to the bowl of yeast mixture.
Mix for 2 minutes at medium speed. Add the remaining cup of flour and continue mixing dough. Add more flour if needed. Scrape down the sides as you mix.
Place dough in a large, greased bowl. Cover loosely with a clean cloth and let rise in a warm, draft-free place for about 1 to 2 hours or until doubled.
Roll dough out on a floured surface to about 1/4-inch thickness. Cut into donuts using a donut cutter or cookie-cutter about one 1-inch and one 3 or 4-inch. Let them stand for about 20 minutes.
Spray the air fryer basket with a cooking oil spray and add donuts- about 2-3 donuts at a time, leaving enough space between each other.
Air fry donuts at 375℉/190℃ for 6 minutes, until deeply golden and the donuts are fully cooked.
Place on a rack to cool and repeat with remaining dough until used up.
Dip donuts in the glaze and let them drip on a rack, top with sprinkles.