Williams, 33, was two wins from completing the calendar Grand Slam but lost 2-6 6-4 6-4 to unseeded Italian Roberta Vinci in the semi-finals.
"This is monumental. It's a shocker," Austin told BBC Sport.
"This is one of the biggest upsets in the history of tennis, because of what was on the line."
Williams went into Friday's semi-final on a 33-match winning streak in Grand Slams stretching back to Wimbledon 2014.
She had hoped to match Steffi Graf's 1988 sweep off all four majors in the same year, and was up against a player she had beaten four times without dropping a set.
Vinci, 32, is ranked 43 in the world and was playing in her first Grand Slam semi-final.