Cook the bacon in a large pot over medium heat until crispy. Remove and set aside to drain excess fat.

In the same pot, add butter or olive oil if needed, then sauté diced onion and sliced carrots until soft and fragrant, about 5 minutes.

Pour in chicken broth, salt, pepper, garlic powder (or minced garlic), dried thyme, and red chili flakes. Bring to a gentle boil.

Add gnocchi and cook according to package instructions until they float to the surface, about 3–5 minutes.

Reduce heat to low and stir in heavy cream (or half-and-half) and grated cheddar cheese until well combined and creamy.

Crumble crispy bacon back into the pot, stir gently, and serve hot in bowls, garnished with additional cheese if desired.