Bring water and 1/2 teaspoon salt to boil in a medium saucepan. Stir in grits. Cook grits until water is absorbed, about 15 to 20 minutes.
While grits are cooking, toss shrimp in cayenne pepper, paprika, garlic powder, garlic, and 1/2 tsp salt.
Heat olive oil in a large skillet over medium heat. Cook shrimp until pink and opaque, about 2 minutes per side. Remove from heat, and set aside.
Once the grits are done cooking, remove grits from the heat and stir in butter and white cheddar until melted and smooth.
To serve, top grits with shrimp and sprinkle with fresh chives. Enjoy warm.