Peel and devein the shrimp. Roughly mince 2–3 shrimp and set aside. Leave the remaining shrimp whole.
Heat olive oil in a large skillet over medium-high heat. Add garlic and cook until lightly golden.
Add shallots, celery, and red pepper. Season with salt and cook for 1 minute.
Reduce heat to medium, partially cover, and cook until vegetables are softened but not browned, about 10 minutes.
Increase heat to medium-high. Stir in smoked paprika, cayenne, and brown sugar. Cook for 1 minute.
Add the blended tomatoes and minced shrimp. Stir well and cook for another minute.
Pour in 1 cup stock or water. Bring to a boil, then reduce heat to medium.
Simmer for about 10 minutes, stirring occasionally, until the sauce thickens to a rich pasta-sauce consistency. Add extra stock if needed.
Add the remaining shrimp and cook until just pink and opaque, about 3–4 minutes. Remove from heat and keep warm.
Prepare the Grits
In a heavy saucepan, combine milk, water, and a pinch of salt. Bring to a gentle boil over medium heat.
Slowly whisk in the grits or polenta in a steady stream to prevent lumps.
Continue stirring for about 5 minutes until the mixture begins to thicken.
Reduce heat to medium-low and cook for 20 minutes, stirring frequently.
Stir in the grated Gruyère cheese and butter until fully melted and incorporated.
Taste and adjust seasoning with salt as needed.
Serve
Spoon the creamy grits into serving bowls and top generously with the spicy shrimp mixture. Serve immediately.