Preheat oven to 350 degrees. Prepare a 9x13-inch pan with cooking spray. Set aside.
In a large skillet, cook sausage over medium-high heat until cooked through. With a slotted spoon, remove the sausage to a paper towel to drain.
If you are using rice grits, add 3 cups of water and the heavy cream in a Dutch oven and bring to a boil over medium-high heat. Add the butter, salt, and pepper and slowly pour the grits into the water and whisk for about a minute. Bring the mixture back to a boil and lower the heat to simmer for about 5 to 7 minutes. Turn the heat off.
If using old-fashioned yellow grits, add 6 cups of water and the heavy cream in a Dutch oven and bring to a boil over medium-high heat. Add the butter, salt, and pepper and slowly pour the grits into the water and whisk for about a minute. Bring the mixture back to a boiling lower the heat to simmer for about 20 to 30 minutes, or until grits are thick and creamy. Stir often as they cook. When they are creamy, turn off the heat.
Add the cream cheese, Velveeta cheese, 1 cup of cheddar cheese, garlic powder, onion powder, and heavy cream. Stir until all the cheeses have melted and the spices are combined. Slowly stir in eggs until blended, then stir in the sausage.
Pour grits into the prepared dish. Sprinkle with remaining cup of cheddar and the Gruyere cheese.
Bake uncovered for 40 to 45 minutes.