Magnus Carlsen was stunned by 16-year-old Alireza Firouzja 8.5-7.5 in the final of the Banter Blitz tournament to claim the USD 14,000 prize.
Iran-born Firouzja is the second-youngest player to reach the 2700 Federation Internationale des Echecs (FIDE) rating.
Ahead the clash, the world no.1 Carlsen called Firouzja, "by far my biggest challenge."
After losing the final, a 90-minute contest, Carlsen called the tenager "amazingly strong."
"Good game, Alireza! That was really horrible, I just was way out of shape, but he deserves full credit," Carlsen said.
"I've just got to be better, but yeah, he's amazingly strong! Full credit."
Firouzja after the win, remained gracious, saying: "I think the match was 50:50."
"I don't think I was favorite or he was favorite ... you should be a little lucky," world's no.21 Firouzja said.
Carlsen and Firouzja will face off once again on April 20 in the $250,000 Magnus Carlsen Invitational.