Off contract in June, Guehi emerged as a top Bosman target for the Spanish giants.
And their interest had also turned the defender's head, with claims in England that Guehi was now favouring a move to Madrid.
But AS says Real have pulled out of talks with Guehi's camp over terms.
It's suggested the player's salary and signing bonus demands are deemed too rich by the La Liga giants.
Also interested in Guehi are Liverpool, Barcelona, Bayern Munich and former club Chelsea.