Remco Evenepoel of Belgium retained the pink jersey after winning the first individual time trial on Saturday.
Dutchman David Dekker (Team Arkea Sansic) finished second in stage two, with Aussie Kaden Groves (Alpecin-Deceuninck) in third place.
Fellow Australian, cycling great Robbie McEwen, meanwhile, has backed Groves after the young sprinter was blamed for a major crash that defined the second stage.
Top Australian overall hope Jay Vine was one of the main victims of the pileup, losing valuable time when he was caught in the chaos.
World champion Evenepoel, who came through unscathed, blamed Groves, accusing the Australian rider of a move that affected the Belgian’s Soudal-Quick Step teammate Davide Ballerini and sparked the crash.
“It was Kaden Groves pushing Ballerini ... it wasn’t a nice manoeuvre,” Evenepoel told cyclingnews.
But McEwen, now one of the sport’s top TV commentators, later analysed video footage of the crash on social media and said there was “not a lot” in the contact.
“Groves elbow contacts Ballerini who is overlapping wheel in front. Switch goes through bunch, DSM rider rear right looks behind & doesn’t see it coming - that’s where crash occurs,” McEwen posted on Twitter.
“Groves’ hands remained on bars, it was a small push with the elbow on Ballerini. Not a lot in it but the wave grows as it goes down the bunch.
“If the DSM rider wasn’t looking behind at the time then everyone would have stayed upright & there would be no discussion.”
An Alpecin-Deceuninck source also defended Groves, saying they did not think he did anything wrong.
The crash happened inside 4km left - had it been inside 3km, all the affected riders would have received the same time as the stage winner.
That was bad news for Vine, who lost 19 seconds and dropped from seventh to 10th overall at one minute, five seconds.
Jack Haig (Bahrain-Victorious), Australia’s other key overall hope, also lost 19 seconds because of the pileup and is 35th at 1:55.
But Haig and his teammates still had plenty to celebrate, with Milan winning in his Grand Tour debut.
The 22-year-old Italian punched his fist in the air in delight as he crossed the line, edging out Dekker and Groves at the end of the flat 202km stage from Teramo to San Salvo.
“I am without words,” the Italian said. “I cannot believe it. My first Giro, the second stage.
“Yesterday I did a nice time trial, I was quite happy with my result and I was pushing good, but I could never imagine that today a victory was coming.”
Mads Pedersen (Trek-Segafredo) and Mark Cavendish (Astana), two of the riders who would have hoped to contest the sprint, were also caught in the pileup.
The split caused by the crash chaos meant only 44 riders were in the front group at the finish.
One of the biggest names to lose time was 2020 Giro winner Tao Geoghegan Hart (Ineos Grenadiers), with the Londoner dropping from fourth to eighth overall at 59 seconds.
The race continues with a 213km stage from Vasto to Melfi on Monday.
AAP