The 26-year-old was high on the Stamford Bridge club's transfer radar this month even after the arrival of Demba Ba from Newcastle United.
Falcao is arguably the hottest property in world football at the moment, having helped Atletico into second place behind Barcelona in La Liga this season and seven points ahead of local rivals Real.
The forward has scored 18 goals in 17 league appearances for the Vicente Calderon Stadium side so far this season. Last year, his double in the Europa League final against Athletic Bilbao helped the club win the trophy.
However, the possibility of teaming up with Zlatan Ibrahimovic at PSG is a mouth-watering one, not least for Falcao himself.
I have always followed the career of Zlatan, it has been incredible. He has had success in all the leagues in which he has played. He is a fantastic player and has scored many goals.
Ibrahimovic has scored 17 times in 18 Ligue 1 appearances for PSG since his arrival from AC Milan in the summer.
The 31-year-old may be in the autumn of his career, but shows little sign of slowing down his excellent strike-rate, while he has also set up a number of opportunities for teammates.
Linking with Falcao could provide the deadliest combination in European football as PSG owners the Qatari Investment Authority follow up their dreams of success at the club with financial muscle.
Ibrahimovic may still display signs of impetuosity, but his ability up front for Carlo Ancelotti's team remains unquestionable. His hat-trick for Sweden in the friendly win over England in November 2012 served to underline his talent.
Placing Falcao, one of the imperious goal scorers in European football today, alongside him would be an explicit statement of intent from the PSG owners.
However, a word of warning for any PSG fans slavering over the Falcao-Ibrahimovic axis: the Colombian also went on record recently as saying Serie A is also a possible option for his next move (The Independent).
Chelsea may not be out of the running just yet, either.
Where do you think Falcao should move to? Let us know below.