The International Olympic Committee picked Rio de Janeiro as the host city for the 2016 Olympic Games, after booting out a bid by Chicago in the first round of voting despite personal appeals from the U.S. president and first lady.
With this win, Brazil will become the first South American city to host the Olympic Games.
White House officials said President Obama, who made a whirlwind trip to Copenhagen, Denmark to join his wife in promoting Chicago, was "disappointed" but felt that his adopted hometown was the strongest and best choice.
"One of the things that I think is most valuable about sports is that you can play a great game and still not win," the president told reporters after his return from the nine-hour long plane ride from Denmark. "And so although I wish that we had come back with better news from Copenhagen, I could not be prouder of my hometown of Chicago, the volunteers who were involved, Mayor Daley, the delegation and the American people for the extraordinary bid that we put forward."
Obama said he spoke to Brazilian President Lula da Silva to congratulate him on the win.
"I think this is a truly historic event," he said. "And as neighbors in the Americas, as friends to the Brazilian people, we welcome this extraordinary sign of progress and the fact that the 2016 Games will be in the Americas."
At Chicago's Daley Plaza, there was an audible gasp from the crowd when the news was announced. Even people in the press room in Copenhagen were visibly surprised.
Obama said he was proud of the U.S. delegation and their work.
"I have no doubt that it was the strongest bid possible, and I'm proud that I was able to come in and help make that case in person," the president said. "I believe it's always a worthwhile endeavor to promote and boost the United States of America and invite the world to come see what we're all about."
White House officials say the president thought the short trip was worth it, even if Chicago did not win.
"The president would've been criticized if he didn't go. There were some who criticized him for going. At the end of the day, it doesn't matter," White House Senior Adviser David Axelrod told ABC News. "As far as we're concerned it was the right thing to do and now we move on to other things."
Critics were quick to seize on the president's failed attempt. Conservative commentator Rush Limbaugh called today the "worst day of his presidency."
"Obama demeaned the office of the presidency, going on this sales pitch," Limbaugh said on his radio show.
Earlier this week, some GOP lawmakers had criticized Obama for jetting off to Copenhagen when he has a full plate of big agenda items like health care, Afghanistan and Iran.
"Listen, I think it's a great idea to promote Chicago, but he's the president of the United States, not the mayor of Chicago," House Minority Leader John Boehner said Thursday. "And the problems we have here at home affect all Americans, and that's where his attention ought to be."
But some said Obama made the right decision in promoting the United States on the international front.
Republican strategist Alex Conant said despite the loss, Obama's personal pitch was a good thing.