Blue Origin's New Glenn rocket unleashed a massive fireball into the sky as it exploded during a test on Thursday, in the latest blow to billionaire Jeff Bezos's space ambitions.

Footage shows the towering rocket erupt in an inferno, followed by a mushroom cloud of smoke as bystanders gathered to watch the launch gasp "Oh no!" and "Oh my God!"

Bezos's space company Blue Origin said in a brief statement posted to X that it had experienced an "anomaly" during the test in Cape Canaveral in the US state of Florida, and that "all personnel have been accounted for."

The explosion is the latest setback to the Amazon boss's position in the frenzied race between private companies pushing for space exploration.

Explosion investigated

"It's too early to know the root cause but we're already working to find it," Bezos wrote on X.

"Very rough day, but we'll rebuild whatever needs rebuilding and get back to flying. It's worth it."

The New Glenn rocket, which stands at 98 meters (321 feet), is at the heart of Blue Origin's space ambitions, particularly in its battle against Elon Musk's SpaceX, which is currently developing the biggest rocket in history, Starship.

Musk offered his condolences, calling the accident "most unfortunate."

Past challenges

The disaster comes weeks after the New Glenn rocket failed a mission to deliver a communications satellite into the correct orbit, prompting an investigation.

Although the company successfully reused and recovered a booster for the rocket, the uncrewed mission did not deliver the satellite from the company AST SpaceMobile.

The US Federal Aviation Administration (FAA) said in response that it required Blue Origin to conduct a "mishap investigation," which was completed earlier this month.

"The FAA has approved our NG-3 report, and corrective measures have been implemented," Blue Origin said last week, explaining that thermal conditions caused one of the rocket's engines to not achieve its full thrust, causing it to miss its target orbit.