HashiCorp switched from MPL to BSL. Joined CNCF, 160+ contributors, added state encryption.
Terraform (and OpenTofu) is an infrastructure-as-code tool that lets developers define cloud infrastructure in declarative configuration files (HCL). It manages resources across every major cloud provider — AWS, Azure, GCP, and hundreds of others — through a provider plugin architecture. It's used by millions of developers and is foundational to modern DevOps workflows.
On August 10, 2023, HashiCorp dropped a bomb on the infrastructure-as-code world: Terraform, the de facto standard for cloud provisioning used by millions of developers, was switching from the permissive Mozilla Public License (MPL v2.0) to the restrictive Business Source License (BSL 1.1). The community learned about it with little advance notice and zero opportunity for input.
The response was swift and organized. Within two weeks, a manifesto appeared calling for an open-source fork, eventually gathering over 1,000 individual pledges and more than 100 corporate signatures. Companies including env0, Gruntwork, Spacelift, Scalr, and Harness — many of whom had built their entire businesses on Terraform — pledged developers and resources. By August 25, the fork was public. By September, it was under the Linux Foundation and renamed from OpenTF to OpenTofu.
OpenTofu forked from Terraform 1.5.6 and quickly began differentiating itself. The project added state encryption (a feature the community had been requesting from HashiCorp for years) and attracted over 160 contributors. The project's momentum was so strong that HashiCorp got nervous — and in April 2024, sent a cease-and-desist letter accusing OpenTofu of copying BSL-licensed code for a "removed block" feature.
OpenTofu's response was devastating. They published a detailed analysis showing that the contested code predated HashiCorp's BSL version and had been copied from the original MPL-licensed codebase. Even Matt Asay of MongoDB, who had initially sided with HashiCorp, publicly recanted. CNCF CTO Chris Aniszczyk called HashiCorp's accusations "embarrassing."
In April 2025, the CNCF accepted OpenTofu, cementing its position in the cloud-native ecosystem. The project had proven that when a critical infrastructure tool goes proprietary, the community can not only fork it but improve upon it — if the organizational and financial backing is there.
HashiCorp announces Terraform license change from MPL v2.0 to BSL 1.1
OpenTF fork published after no response from HashiCorp
OpenTF manifesto published; 1,000+ pledges, 100+ company signatures. Renamed to OpenTofu under Linux Foundation
OpenTofu 1.6.0 released with state encryption feature
HashiCorp sends cease-and-desist letter alleging code copying
OpenTofu publishes detailed rebuttal showing code originated from MPL-licensed version
CNCF accepts OpenTofu as a project
“It's embarrassing to see a company light all of its hard-earned developer reputation on fire, on top of attacking open source.”
OpenTofu is one of the most significant open-source forks of the decade. It demonstrated that the BSL licensing strategy — designed to protect vendor revenue from cloud providers — can spectacularly backfire when the affected community is well-organized and well-funded. HashiCorp's subsequent acquisition by IBM in 2024 for $5.4 billion suggests the company's open-source credibility was already priced as damaged goods.
The project also established a template for future license-change forks: publish a manifesto, rally corporate sponsors, join a foundation, and maintain MPL/Apache licensing. OpenSearch, Valkey, and OpenBao all followed variations of this playbook.