Set your air fryer to preheat at 400ºF (200ºC) for about 4 minutes.
In a mixing bowl, combine the chicken pieces with kosher salt, black pepper, smoked paprika, garlic powder, and sugar, stirring thoroughly.
Beat the egg in a separate bowl, then add the seasoned chicken and toss until every piece is coated evenly.
Spread the panko breadcrumbs flat on a plate and coat each chicken piece one at a time with the breadcrumbs.
Arrange coated chicken bites in the air fryer basket making sure they don’t touch, then lightly spray them with oil.
Cook the chicken nuggets at 400ºF (200ºC) for 7 minutes, turning or shaking halfway to promote even browning.
Once cooked to a golden crisp, sprinkle a little extra salt on top and keep warm in an oven set at 200ºF if preparing multiple batches.