The 60-year-old was sacked from his role at Napoli on Tuesday evening.
But ESPN says contrary to several media sources, Ancelotti is not on the list of current potential candidates.
It is thought Arsenal are looking for a younger option to take the club forward, and they also have reservations about Ancelotti's recent managerial record after he struggled at both Napoli and Bayern Munich.
The Gunners board are thought to not be in any rush to make an appointment, as they are desperate to make the right choice rather than to panic and hire the wrong person, and they are in the process of interviewing a number of candidates.
They are also willing to give interim boss Freddie Ljungberg more time to show what he can do after the Swede got his first win on Monday in a 3-1 victory over West Ham.