The Rocket fell to a shock defeat to Elliot Slessor in the Northern Ireland Open on Thursday.
O’Sullivan went down 4-1 to the world number 82, who went on to book his place in the quarter-finals, stopping the possibility of a clean sweep of the four ‘Home Nations’ titles in its tracks after his victory in the English Open.
The sport’s richest ever prize had been offered for such a feat but O’Sullivan claimed he never took the idea seriously.
“I am so happy the chance of the £1million is gone, all the silly headlines, it was ridiculous,” he told Eurosport.
“I went along with it, but you have more chance of winning the lottery.
“Elliot played really well and handled the situation well. He potted some good balls, and was solid and sometime solid is good enough.”
Slessor, 23, went on to beat Sam Craigie in the fourth round to set up a last-eight meeting with Li Yuan.
Four-time world champion John Higgins was also a surprise faller in the third round, beaten 4-3 by Wallsend’s Gary Wilson.
Higgins put together three consecutive century breaks on his way to a 3-1 lead but Wilson rallied brilliantly to turn the tide.
However he fell in the next round to Li 4-1.
Mark Williams is also into the quarter-finals after moving past Akani Songsermsawad and David Gilbert.
Mike Dunn awaits after easing past Joe Perry 4-1.
Robert Milkins also booked his place in Friday’s session, surprising Neil Robertson 4-3 and then moving past Ricky Walden 4-2, to set up an encounter with Yan Bingtao.
Tian Pengfei and Lyu Haotian are keeping the Chinese challenge alive and will play each other having bested Chris Wakelin and Liam Highfield respectively.