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Set Instant Pot to Sauté, and melt butter. Add onion and cook until soft, 5 minutes, then add garlic and thyme and cook until fragrant, 1 minute.
Add potatoes and broth, and secure lid. Set to Pressure Cook/Manual on High for 8 minutes. Follow manufacturer’s instructions to quick release, then remove lid.
In a small bowl, whisk together 2 tablespoons milk and cornstarch to make a slurry.
Set Instant Pot to Sauté. Pour in slurry, remaining 1 cup of milk, and heavy cream. Let boil about 5 minutes, stirring constantly.
Season with salt and pepper to taste. Garnish with cheddar, bacon, and chives before serving.