The process of designing, testing and building an entirely new spacecraft is definitely a difficult one and bound to encounter some issues. SpaceX's efforts to build Starship, its massive new fully reusable spaceship, is no exception. The most recent Starship prototype, designated "SN3," failed catastrophically during cryogenic proof testing, which is designed to simulate pressures the spacecraft would encounter during a test flight.
That might sound familiar: SpaceX's first prototype, the Mk1, was also destroyed during pressure testing of its fuel tank, and the next full-scale prototype under development, SN1, was also destroyed during a pressure test in late February. Another prototype, SN2, was stripped to just a test article designed for cryogenic testing, and it passed that same cryo test, but now the next full-scale prototype being developed, SN3, has once again succumbed during cryogenic testing at SpaceX's launch stand in Boca Chica, Texas.
You can see the moment the stacked SN3 fuselage crumples during the cryogenic pressure testing in the video below from Mary (@BocaChicaGal) on YouTube, and its seems pretty likely there won't be any attempt to rebuild and reuse this prototype. Instead, SpaceX will likely proceed to building its next prototype, presumably named SN4. The original plan was to have SN4 be a high-altitude flight prototype, but that seems unlikely given the result of this test.
SpaceX founder and CEO Elon Musk said on Twitter that the SN3 failure "may have been a test configuration mistake," rather than an issue with the spacecraft itself. He said that the company will no more once they undergo a data review in the morning.
This is most definitely a setback, but not an unusual one in the process of spacecraft development. SpaceX has also had successes in their development program, including a test of the "Starhopper" sub-scale prototype, which proved out the basic performance of the Raptor engines that SpaceX is using to propel the Starship, and eventually its Super Heavy booster.