Selena Gomez and Austin Mahone
Courtesy Austin Mahone
01/29/2014 at 05:25 PM EST
Don't believe the hype.
Rumors are swirling that Austin Mahone, 17, and Selena Gomez
, 21, are a couple, but the teen pop star tells PEOPLE there's nothing to the chatter.
"We're just friends," he says. "She's really cool … I mean, I think she's really pretty but every time I'm in L.A., she's like, 'Hey you're in L.A., lets hang out,' " he added at an Aquafina FlavorSplash press conference Wednesday. "So it's cool.
An industry insider who has worked with both pop stars also tells PEOPLE that Mahone and Gomez are not officially an item.
"Maybe they are more than just friends but they are certainly not dating," says the source.
Meanwhile Gomez, who reunited with ex Justin Bieber
earlier this year, recently partied with a mystery man
The insider, however, also says Gomez and Mahone have a special connection. "They've been hanging out over the last few months," the source says. "They have a lot of respect for each other."
Mahone confirmed their friendship at a Grammy event last weekend. "We're super close friends. She has some new music coming out. She showed me some of her music and it's incredible," he told PEOPLE at the Universal Music Group 2014 Post Grammy Party.