"The decision was reached to form a study group, Arbeitsgemeinschaft für Osteosynthesefragen, or AO, to conduct research in bone healing, with particular reference to the influence of the mechanical environment of the fracture upon its healing pattern. Along with a group of surgeons, who first met together in March 1958 at Chur, this embryonic AO took a number of initiatives."
They basically study the healing of bone, mainly in regards to internal fixation (plates/screws/rods...). Their corporate sister, Synthes, sells the plates/screws/rods... They put on courses for orthopaedic residents and attendings. Many other companies sell implants as well.