The 17-year-old teenage sensation had reportedly turned down PSG's original offer and was set to join the Gunners on a three-year deal, with an option of a further two years.
But Adli last week put pen to paper on a new long-term deal with the Ligue 1 giants.
RMC journalist Loic Tanzi speaking to Get French Football News explained why, he said: "A few clubs had been interested in him, notably Arsenal.
"It depends on the source – some of them were saying that he'd agreed to sign but then turned around and decided to stay at PSG, but those closer to him said that it wasn't a U-turn and that he hadn't agreed anything with Arsenal.
"He simply had the two options on the table but decided to stay at PSG."