In the instant pot, saute the bacon until crispy- about 8-10 mins.
Remove the bacon and place it on top of a paper towel.
Remove excess oil from the Instant Pot inner liner, leaving enough oil to saute the onions.
Add the onions to the oil and cook until translucent - about 2-3 mins.
Turn the saute function off and add the diced potatoes, salt, black pepper, garlic powder, chicken bouillon and water to the pot.
Stir it, close the lid and set the pressure cooker to 1 minute on high. Turn the warming function off.
Let it vent naturally. Open the lid, turn the saute function back on.
Add the milk, heavy cream, sour cream, and fresh rosemary. Stir and bring to a boil.
Turn the saute function off and pour the potatoes and sauce into a serving platter.
Top it with the crispy bacon pieces and serve.