Cut the cauliflower into florets and pulse in a food processor until it resembles fine rice. Microwave the riced cauliflower in a bowl covered with a damp paper towel for 4 to 5 minutes until softened. Allow it to cool until safe to handle.
Transfer the cooked cauliflower to a clean kitchen towel or cheesecloth. Wring out as much liquid as you possibly can - this is the most important step. Squeeze repeatedly until almost no moisture drips out. Under-squeezing will result in a soggy, fragile crust.
Place the dried cauliflower in a bowl. Add the egg, 1/2 cup mozzarella, parmesan, italian seasoning, garlic powder, and salt. Mix thoroughly until a cohesive dough forms.
Cut a piece of parchment paper to fit your air fryer basket. Shape the cauliflower dough into a round crust about 7 inches across and 1/4 inch thick on the parchment. Press the edges slightly thicker to form a rim.
Preheat the air fryer to 375 degrees F. Carefully transfer the crust on its parchment into the air fryer basket. Air fry at 375 degrees F for 8 to 10 minutes, until the crust is golden on the bottom and feels firm to the touch.
Carefully flip the crust over. Spread the marinara sauce over the top, then scatter the 3/4 cup mozzarella and the mini pepperoni evenly over the sauce.
Air fry at 375 degrees F for another 4 to 5 minutes, until the cheese is fully melted, bubbly, and beginning to turn golden in spots.
Remove the pizza from the air fryer. Top with fresh basil leaves and a sprinkle of red pepper flakes if desired. Let it rest for 2 minutes before slicing and serving.