Chalobah was linked with a move to Germany last summer but he ultimately stayed at Stamford Bridge following the end of the window.
The 24-year-old has not featured for Chelsea this season and was expected to leave in January with interest from Bayern Munich and Dortmund.
The two German clubs had their eyes on him but it has been claimed that is no longer the case.
According to German broadcaster Sky Deutschland, the two Bundesliga outfits are no longer in the race to sign Chalobah.
Bayern Munich and Dortmund have pulled out of the race to sign him from Chelsea in the January transfer window.
He is currently out injured and is only expected to be match-fit towards the end of January.
The two German clubs do not want to sign a player who is just coming back from injury, while they would also likely prefer to do business towards the start of the window.