Preheat oven to 350 degrees.
Prepare 3 cake pans by greasing and flouring completely the sides and bottom of pans. I like to place a parchment circle on bottom of pan also. (See my video for instructions). You can also use a cooking spray with flour already in the spray.
In a large bowl place white granulated sugar, flour, cocoa, baking powder, baking soda, and salt. Whisk until well combined.
Make a well into dry ingredients and add water, milk, eggs, butter (or oil), and vanilla.
Gently whisk the wet ingredients on top to combine somewhat. Gradually start whisking wet into the dry for about 2 minutes until nice and smooth and lump free.
Divide batter into the 3 pans.
Bake in preheated oven for 20-25 minutes until cake pulls away from sides and a toothpick inserted into middle comes out clean. (Crumbs are fine).
Remove cakes from oven and place pans on cooling racks to cool for 15 minutes. Then remove cakes from pans and place on the cooling racks and allow to cool completely before frosting.
Let's prepare the Frosting
In large bowl, beat together butter and peanut butter with a hand mixer until smooth. Add in vanilla and salt (if needed) and beat for a minute.
Very carefully and in batches, beat in the powdered sugar. Add milk a little at a time until your frosting is nice and smooth and creamy.
Place a dab of frosting to the center of your cake stand or plate. Place one layer of cake upside down on the cake plate. Spread generously with frosting to the edges.
Top with another layer of cake, upside down, and generously spread more frosting.
Place final layer of cake right side up and generously spread frosting on top.
Spread frosting on the sides evenly as possible.
Sprinkle chocolate chips on top. Enjoy.