In a large pot over medium heat, add 8-10 slices of thick-cut bacon. Cook until the bacon is crispy, about 8-10 minutes, flipping occasionally for even cooking. Once done, transfer the crispy bacon to a paper towel-lined plate to cool, leaving the rendered fat in the pot for the next step.

In the same pot, turn the heat to medium and add 1 tablespoon of butter or olive oil. Once melted, toss in 1 diced onion and 2 sliced carrots, sautéing for about 10-15 minutes. Cook until the vegetables are tender and the onion is translucent, stirring occasionally to avoid sticking.

Pour in 4 cups of low-sodium chicken broth, increasing the heat slightly to bring the mixture to a simmer. Stir the pot to combine all the flavors, and allow it to simmer gently for about 5 minutes, releasing the savory aroma throughout your kitchen.

Reduce the heat to medium-low, and stir in 2 cups of heavy cream or half-n-half, along with 1 to 2 teaspoons of salt, 1 teaspoon of pepper, 1 teaspoon of garlic powder, 1/4 teaspoon of dried thyme, and 1/2 to 1 teaspoon of red chili flakes based on your heat preference. Let this simmer gently for another 5 minutes to meld the flavors beautifully.

Gradually add in 2 cups of grated sharp cheddar cheese to the pot. Stir continuously until the cheese melts completely and the soup reaches a silky, creamy texture, which should take about 3-4 minutes. Avoid high heat to prevent the cheese from clumping.

Gently fold in 16 ounces of fresh or frozen gnocchi into the soup and cook for an additional 2 minutes. This helps the gnocchi become tender and soak up the rich flavors. Finally, stir in the chopped bacon and taste the soup, adjusting the seasonings as necessary before serving warm.