Several videos on social media showed debris streaking through the dusk skies near south Florida and the Bahamas after Starship's breakup in space, which occurred after a SpaceX live stream of the mission showed it tumbling uncontrollably.
The 123-metre rocket system had lifted off on Thursday evening at SpaceX's sprawling Boca Chica, Texas, rocket facilities, with its Super Heavy first stage booster returning back to land as planned.
But minutes later, SpaceX's live stream showed the Starship upper stage spinning in space, while a visualisation of the rocket's engines showed multiple engines shut down before the company confirmed it had lost contact with the ship.
"Unfortunately this happened last time too, so we've got some practice now," SpaceX spokesman Dan Huot said on the live stream.
The Federal Aviation Administration issued ground stops at Miami, Fort Lauderdale, Palm Beach and Orlando airports because of "space launch debris".
The failure is another setback for SpaceX's whirlwind Starship development program.
Musk, SpaceX's CEO, has pushed for swift advances in the rocket's development in 2025.
But a failure in Starship's first attempt to launch since exploding in space in January puts a dent in Musk's development vision as he aims to build a rocket capable of sending bigger batches of satellites to space as well as humans to the moon and Mars.
The Starship failure in January ended eight minutes into flight when the rocket exploded in space, raining debris over Caribbean islands.Â
Like last time, Starship had four mock satellites to release once the craft reached space on this eighth test flight as a practice for future missions.
They resembled SpaceX's Starlink internet satellites, thousands of which currently orbit Earth, and were meant to fall back down following their brief taste of space.
Starship's flaps, computers and fuel system were redesigned in preparation for the next big step: returning the spacecraft to the launch site just like the booster.
During the last demo, SpaceX captured the booster at the launch pad, but the spacecraft blew up several minutes later over the Atlantic. No injuries or major damage were reported.
- with AP