Thank you for your query.
Respiratory distress syndrome
(RDS) is a condition where the surfactant levels are low and the alveoli cannot remain open by themselves. This prevents aeration. This condition is usually seen in prematures but can occur across all gestational ages.
Your nephew was delivered out of a difficult delivery process and may had some obstetric trauma like intracranial injury
which may also be responsible for turning blue. This is quite unlikely as the doctors must have investigated for it by now.
In the NICU he is being given ventilatory support and must have been given surfactant therapy for RDS. It shall take some time for things to settle down before the doctors can tell about the prognosis.
I hope I have answered your query to your satisfaction.
Wishing your nephew an early recovery.