Pioli’s side enjoyed the perfect first half as Ante Rebic and Zlatan Ibrahimovic fired them into a comfortable lead at the interval.
However, a quickfire double from Marcelo Brozovic and Matias Vecino in three second half minutes drew Inter level, before Stefan De Vrij and Romelu Lukaku goals sealed a stunning turnaround.
“We had prepared well and were looking comfortable, but those three minutes changed the game completely,” Pioli bemoaned in his post match press conference at the Stadio San Siro.
“Inter took courage and we became fragile and regretted those three minutes. It is a shame because we played really well.
“We dominated for long periods against a stronger opponent but it is vital that we remain in games for the full 90 minutes.”
Milan must now turn their attention towards the first leg of the Semi-Final of the Coppa Italia, as they take on Juventus at home on Thursday.