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Start by making the vanilla pudding. In a small bowl, dissolve the two packs of vanilla pudding powder with a little bit of the milk (about ½ cup) and sugar, whisking until smooth.
In a large saucepan, bring the remaining milk to a boil over medium heat. Once boiling, slowly stir in the pudding mixture, whisking constantly to avoid lumps.
Let the mixture boil for one minute, then remove it from the heat. Stir occasionally as it cools slightly to prevent a skin from forming.
2. Make the Cake Batter
While the pudding cools, prepare the cake batter. In a large mixing bowl, cream together the butter, sugar, and vanilla sugar until light and fluffy. Add the eggs, one at a time, beating well after each addition.
Gradually sift in the flour and baking powder, mixing until a smooth batter forms.
3. Assemble the Cake
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