The Premier League side opened the scoring on a hot and steamy night in Florida courtesy of Bernardo Silva, before conceding two to lose the lead.
But then came extra time, with Al-Hilal sneaking ahead courtesy of former Chelsea man Kalidou Koulibaly, before Phil Foden got his side back into the match, only for Marcos Leonardo to grab the winner after 112 minutes of play.
“I cannot thank the players enough for training and playing how they have been.
“But it was a difficult game. The margins were minimal. We created a lot and (Yassine) Bounou made incredible saves but we were so open.
“We would have loved to have continued, it will only be once every four years, and we had a feeling that the team was doing well.
“But we go home, and now it is time to rest and rest our minds for the new season.”
While no side ever wishes to lose, the one consolation for Man City is that extra rest ahead of the upcoming season, with their first match scheduled for August 16.
As for the match itself, Guardiola had some thoughts on where City let it slip away.
“We regret a little bit that we allowed them to run a bit more. They defended so deep, the wingers were so quick and Bounou made a lot of saves,” was his analysis.
“In the end, we have to score and be clinical. They arrived more in the transitions. They did not create much in the first half but we did but could not finish it.
“I had a feeling we could go through but they punished us on the transitions.”
For Al-Hilal, they move on in the competition having beaten one of the giants of the game – a result that has sent shock waves through the footballing world.
“The key to this result was the players, the heart they put on the pitch,” said head coach Simone Inzaghi, who only took over the role last month after leaving Inter Milan.
“We had to do something extraordinary because we knew how good Manchester City are, we knew we had to climb Mount Everest without oxygen and we were great.
“Guardiola is the best coach in the world, but tonight we did our best and we deserved the result.”
