Ancelotti recently spoke in the highest terms of the young forward, whose future in Italy has been the subject of much debate over recent weeks, with Inter boss Jose Mourinho dropping him from his squad following a breach of club discipline.
That has led to reports suggesting Inter may be willing to part with the 19-year-old during the January transfer window and Ancelotti's praise in La Stampa has sent speculation into fever-pitch.
But Ancelotti has since denied the Premier League leaders are in talks with the player.
He said: "Balotelli? He's not a player we are negotiating with."