Press Sauté on your Instant Pot and adjust to High.
Add olive oil, sliced red onion, and minced garlic. Sauté for 3 minutes until fragrant.
Deglaze the pot with chicken broth and lime juice, scraping the bottom to remove browned bits.
Add chicken strips to the pot.
Combine chili powder, smoked paprika, salt, and garlic powder in a bowl. Sprinkle half over the chicken.
Layer bell peppers over the chicken and sprinkle remaining spice mixture on top. Do not stir.
Lock the lid, turn the knob to Sealing, and set the time to 2 minutes.
Perform a Quick Release by turning the knob to Venting.