In terms of sheer excitement, Elon Musk's company didn't disappoint, underscoring its technical prowess by catching the first stage booster in the "chopstick" arms of its launch tower for a second time.

But the triumph was short-lived when teams lost contact with the upper stage vehicle. SpaceX later confirmed it had undergone "rapid unscheduled disassembly," the company's euphemism for an explosion.

A taller, improved version of the biggest and most powerful launch vehicle ever built blasted off from the company's Starbase in Boca Chica, Texas, at 4:37 pm (2237 GMT) for its seventh test.

The gleaming prototype rocket is key to Musk's ambitions of colonizing Mars, while NASA hopes to use a modified version as a human lunar lander.

Around seven minutes after liftoff, the Super Heavy booster decelerated from supersonic speeds -- generating sonic booms -- before descending gracefully into the launch tower's waiting arms, prompting an eruption of applause from ground control teams.

The maneuver was first successfully executed in October, but not November, when Super Heavy made a controlled splashdown in the Gulf of Mexico instead.

Soon after the latest booster catch, however, announcers on a live webcast confirmed the upper stage vehicle had been lost following a propulsion anomaly.

The FlightAware tracker showed several planes in the Atlantic altering course near the Turks and Caicos Islands, while users on X shared dramatic footage purportedly capturing the spaceship breaking apart in a fiery cascade during atmospheric re-entry.

"Success is uncertain, but entertainment is guaranteed!" Musk wrote on X, sharing one of the clips. He added the cause of the explosion appeared to be an "oxygen/fuel leak" and that the company would take corrective steps.

A Federal Aviation Administration (FAA) spokesperson said the agency "briefly slowed and diverted aircraft around the area where space vehicle debris was falling."

- Well wishes -

Ahead of the SpaceX launch, Blue Origin's massive New Glenn rocket reached orbital space for the first time, marking a potential turning point in the commercial space race.

SpaceX has long dominated orbital launches with its Falcon 9 rocket, securing contracts from private companies, the Pentagon and NASA.

In contrast, Blue Origin had been limited to short hop suborbital flights with its smaller New Shepard rocket -- but could now look to erode SpaceX's market share.

Although the two tech titans have had a contentious past, Musk congratulated Bezos "on reaching orbit on the first attempt," and Bezos returned the goodwill a few hours later.

"Good luck today @elonmusk and the whole spacex team!!" the Amazon founder wrote on X.

NASA's outgoing chief Bill Nelson meanwhile offered his congratulations to SpaceX for the booster catch, adding: "Spaceflight is not easy."

For this flight, SpaceX announced it had made numerous upgrades, and increased Starship's size by a few feet to 403 feet (123 meters) tall. New Glenn stands 320 feet (98 meters) tall.

While its Falcon rockets remain steadfast workhorses, SpaceX has made clear it sees Starship as its future.

The first three test flights ended in dramatic explosions, resulting in the loss of vehicles. However, SpaceX has rapidly iterated on its design, reflecting its "fail fast, learn fast" philosophy.

Musk is now aiming to drastically ramp up the frequency of tests, requesting permission from the FAA to carry out 25 in 2025, compared to just four in 2024.

The agency is holding public meetings on potential environmental and regulatory concerns, amid accusations that SpaceX has harmed ecologically sensitive areas and violated wastewater regulations.

But with Musk now part of Trump's inner circle, the billionaire may find a smoother path under the incoming administration.

Meanwhile, Bezos and fellow tech mogul Mark Zuckerberg are set to attend the president-elect's inauguration on Monday, signaling warming ties.