OpenTofu was created in September 2023 as a direct response to HashiCorp's decision to change Terraform's license from MPL 2.0 to the Business Source License (BSL). Managed by the Linux Foundation, it aims to keep Infrastructure as Code truly open source.
OpenTofu maintains full backward compatibility with Terraform 1.5.x configurations, providers, and modules, making migration straightforward. It has also introduced unique features not available in Terraform, including state file encryption, early variable and local evaluation, and provider-defined functions.
The project has strong industry backing from companies including Gruntwork, Spacelift, env0, Scalr, and major cloud providers. It's completely free under the MPL 2.0 license.