The Problem Child, 28, was halted in the sixth round by AJ, 36, in their heavyweight bout in Mimi, Florida last month, having previously been ranked 14th at cruiserweight after his July win over Julio Cesar Chavez Jr, 39.
Paul entered the bout ranked 15th with the WBA after edging into the cruiserweight list earlier this year, but the loss has seen Bosnia’s Edin Puhalo, 37, move into that final ranking spot.
The fight marked Joshua’s first appearance since his September 2024 defeat to Daniel Dubois, 28.
Paul later revealed he suffered a broken jaw in two places during the contest, though he maintained he had moments of success and even troubled Joshua briefly.
Speaking on brother Logan Paul’s Impaulsive podcast, he said: “It was a great experience. I wish I had more than three weeks to put on more muscle so I could really hit him.
“My biggest mistake was not doing altitude training.
“I see where I could have done better so I’m a little disappointed but I also know how good he is. I had him wobbled at one point, but he had his hands up better this fight.”
Paul added: “It’s not that hard to get your a** beat. I won two rounds then he won two, then I got dropped.
“I was doing good, my cardio, just the mental pressure of the big guy, and sparring the big people is different than the 10oz gloves so I was feeling his power a lot more.”
The defeat leaves Paul with a professional record of 12-2, with his only other loss coming against Tommy Fury, 26, by points in February 2023.
Despite slipping out of the WBA rankings, Paul has insisted his long-term ambitions in boxing remain unchanged.
Attention is now turning to what comes next, with Paul targeting a rematch with Fury as he plots his comeback from the Joshua loss.
His promoter and Most Valuable Promotions co-founder Nakisa Bidarian has stressed that the setback has not dulled his desire to settle unfinished business with TNT.
Even so, Bidarian admitted he didin’t want to set up a fight with Fury again, calling the boxer “unreliable” - but insisted he would work to give Paul the opponents he wants.