Blue Origin's newest rocket has been grounded after the Federal Aviation Administration (FAA) ordered an investigation into a mishap involving the failed launch of a satellite.

The company, founded by Amazon billionaire Jeff Bezos, attempted to place a satellite from AST SpaceMobile using its New Glenn rocket but was unable to get it as far into orbit as intended.

Blue Origin's chief executive Dave Limp said the failure was caused by a lack of sufficient thrust in an engine.

AST SpaceMobile's share price fell by more than 6% on Monday. Limp stated: We clearly didn't deliver the mission our customer wanted, and our team expects.

Blue Origin is investigating the incident, which happened on Sunday, with oversight from the FAA.

A spokesperson for the authority stated: The FAA is requiring Blue Origin to conduct a mishap investigation.

The FAA will oversee the Blue Origin-led investigation, be involved in every step of the process and approve Blue Origin's final report, including any corrective actions.

Limp mentioned that the investigation will enable Blue Origin to learn from the data and implement the improvements needed to quickly return to flight operations. The FAA will determine based on the investigation findings when New Glenn can be launched again.

Sunday's operation was only the third flight for the New Glenn rocket. Blue Origin was planning on launching a dozen times this year.

The rocket was carrying an AST satellite intended for low earth orbit that would be used for mobile phone connectivity.

Since New Glenn did not drop the satellite as far into orbit as necessary, it will be deemed unusable.

AST announced that the loss will be covered by insurance, though the cost has not been disclosed.

As companies increasingly venture into providing internet access via satellites, Blue Origin has stated earlier this year it would launch thousands of such satellites into low-earth orbit as part of a new project named TerraWave.

Amazon is intensifying its efforts in this domain, having recently acquired a satellite manufacturer and operator for $11 billion to bolster its own initiative called Leo.

Both projects seem to be racing to catch up with Starlink, Elon Musk’s company which has already deployed thousands of operating satellites in orbit to offer connectivity to consumers.

Starlink is a major component of SpaceX, which is anticipated to go public this year in what could be a record-setting stock market listing.