Sanches is reportedly the latest target for the big-spending Italians, who have signed a raft of players including Italy centre-back Leonardo Bonucci from Juventus and Sanches' international team-mate Andre Silva in a busy transfer window.
Bayern Munich CEO Karl-Heinz Rummenigge has claimed Sanches could be out of Milan's price range, although a loan to San Siro has also been suggested.
Speaking ahead of Bayern's International Champions Cup clash with Milan in Shenzhen on Saturday, Ancelotti hinted Sanches could yet move to the the Italian's former club.
"Milan have had a great transfer window so far," Ancelotti told reporters on Friday. "They've bought a lot of players and the impact of the new owners [Li Yonghong's Rossoneri Sport Investment Lux] has been important.
"I hope they have a great season, I have a good relationship with [Milan head coach Vincenzo] Montella and I think he did a good job last season. They have a better team this year and they'll fight for the Scudetto, I wish them the best. Regarding my time, Milan has changed a lot, but I have good memories.
"I'm always happy to face Milan because I'm still a Milan fan and I push my players to become Milan fans.
"Sanches? Right now he's working for us, but yes I'm working to make him a Milan fan."
But the Bayern boss indicated there will be no immediate announcement regarding a potential move for the 19-year-old midfielder.
"There's nothing new on his future," Ancelotti added.