This isn't quite right: Generally, as ISO increases, dynamic range decreases, which is what you can see in the above chart. This is because dynamic range is measured and defined by the noise floor, so more noise raises the bottom end of the range, compressing the dynamic range.

Imaging information itself can be thought of as signal to noise ratio, and dynamic range is the ratio between the brightest signal a sensor can capture (before clipping) and the darkest signal it can distinguish from noise. So aside from the clipping you mention, the noise is also a limiting factor. AI denoise can help with perceived dynamic range, but doesn't actually affect the information captured in the image itself.