The Open Source Initiative (OSI) was founded in 1998 by eric-raymond and bruce-perens in the wake of Netscape's announcement that it would release the source code of its browser. The founding is a key event in open-source-definition-schism, part of the free-vs-open-source-schism-1998-2007 era.
The OSI was established to promote a deliberately pragmatic, business-friendly reframing of stallman's free-software-definition. The "Open Source Definition" — derived from bruce-perens's Debian Free Software Guidelines — covers much of the same technical ground as the free-software-definition but strips out Stallman's explicit ethical framing around software-freedom-vs-open-source.
stallman regards the OSI's framing as evasive: the term "open source" focuses on practical benefits (better code, security, collaboration) while avoiding the ethical argument that proprietary software wrongs users by denying them the four-freedoms. His critique is laid out in why-open-source-misses-the-point and documented in stallman-vs-open-source-philosophical-core.
The OSI approves licenses as "open source," including many that do not include copyleft provisions. This is significant because non-copyleft "open source" licenses permit companies to take open-source code and make proprietary products from it — exactly what stallman's gpl-copyleft-mechanism was designed to prevent.
tim-oreilly and linus-torvalds have generally aligned with the OSI's framing. bradley-kuhn and eben-moglen have maintained Stallman's free-software-definition standard. The tension between these camps continues to shape software licensing debates.