Djokovic's 10-match unbeaten run in Melbourne Park finals was broken in the 11th on Sunday as Alcaraz claimed a 2-6, 6-2, 6-3, 7-5 win at Rod Laver Arena.
World number one Alcaraz has now stopped him from taking the outright Grand Slam record he shares with Margaret Court three times in major finals, following back-to-back deciders at Wimbledon in 2023-24.
For all that, the 38-year-old said he was happy with his tournament and grateful to make the title match even if the loss was tough to swallow.
"It's hard just right after the match to you know, to be all positive and smiling because you are a competitor and you don't want to lose," he told reporters. "You don't like to lose. That's the kind of feeling.
"I managed to beat Jannik (Sinner) - who is double-defending champion here and won the last whatever, four, five matches against me - in five sets, very proud of that. Incredible match, incredible achievement.
"But you're speaking to me ten minutes after I lost the final, so of course I'm going to be a little bit bitter about losing.
"But, again, I lost to a number one in the world and already a legendary player."
After dominating the first set, Djokovic said he lost energy in the second and third but declined to elaborate, saying he did not want to take anything away from Alcaraz's achievement.
He rued failing to convert a break point at 4-4 in the fourth set with a misfired forehand after having revived late in the match with the help of the crowd.
"That forehand, I had a good look at that forehand. Yeah, my forehand broke down in important moments," he said.
"That's what happens. I mean, one or two shots can change the momentum of the match and switch things around. A lot of what-if scenarios in my head."
As brave a challenge as Djokovic put up, he may never have had a better chance for another major trophy. He had a walkover in the fourth round and was two sets down in his quarter-final when opponent Lorenzo Musetti retired injured.
In his runner-up speech, he said he did not expect to be standing at a Grand Slam trophy ceremony again.
"I have belief, and I have always confidence and vision to win a Slam, a Slam anywhere, to win anywhere where I play, but I did not expect it. That's different," he said later.
He conceded, light-heartedly, that Alcaraz and Italian Sinner would continue to be in his way at the majors.
"The two of them, I guess, are going to be fighting for biggest titles, and then the youngsters like myself are going to try to catch up."