Chop mushrooms, cashews, carrot, and water chestnut into tiny bits and set aside.
To prepare the tofu, place tofu in a cheesecloth bag and wring out as much liquid as possible into a somewhat dry paste.
Transfer tofu into a large mixing bowl, add the chopped ingredients, then season with soy sauce, salt, sugar, white pepper, a drizzle of toasted sesame oil, cornstarch and mix until well combined.
Divide the mixture into 9 portions. Form each portion into a ball by pressing it between both palms.
Preheat the air fryer to 390°F (200°C) for 3 minutes, then air fry tofu balls until golden brown, about 10 - 12 minutes. Remove and set aside