Prepare the chili by removing the seeds and veins from the inside. Dice into very small pieces. Make sure to wash your hands with dish soap following the handling of peppers. Do not touch your eyes.
In a mixing bowl, add the flour, baking soda, baking powder, salt, and peppers. Mix completely.
Using a cheese grater, shred the butter into the flour mixture. You can use a more traditional method with a pastry mixer.
Using your hands, incorporate the butter and flour mixture. You will want the butter coated in flour in small pea size bits.
Slowly add the milk and continue to mix with your hand. This will be messy and sticky.
Add 1 cup of shredded cheese and mix.
On a flat dry surface, flatten the biscuit dough until 1” thick. I use a wide-mouth mason jar to cut the biscuits out of the dough. After biscuits are cut, re-form and flatten the remaining dough for cutting until all the dough is used.
Place biscuits in the air fryer basket on parchment paper. Sprinkle biscuits with remaining cheese. Cook at 400°F for 8-10 minutes until biscuits are slightly golden.
Remove and let cool.
Enjoy!