Gay scorched through the 100-meter tracks in 9.84 seconds to beat Bolt, who came in second, with a time of 9.97 seconds.
Halfway through the race, Gay held a narrow lead over Bolt. Holding on to the lead, Gay subsequently finished first and earned a prize of a $10,000 diamond.
"Just one of those days. I"m not unbeatable. I did not train as hard as in past years, so I can"t complain. And it was Tyson Gay. My congratulations to him. I"m not in my best shape and he is in great shape.... I simply wasn"t ready enough for that clash," said Bolt.
Interestingly, Stockholm seems to be the place where Bolt fails as his previous defeat was also here in Jul 2008 when fellow Jamaican Asafa Powell beat Bolt.
The victor, on the other hand, said, "I'm really happy with the win, even though Usain Bolt isn't in the best shape. It was very important to beat someone like that for the fans and the sport."